CAUSES  OF 


THE  CONFLICT 

BETWEEN 

CAPITAL  AND  LABOR. 


BY  D.  H.  HENDERSHOTT, 


ELEVEN  YEARS  PRINCIPAL  OF  THE  FIFTH  WARD 
public’  school  in  HORNELLSVILLE. 


CANISTEO  N.  Y.; 
TIMES  STEAM  PRINT. 


1885. 


/ 7 vJ?  1"^  Jiro  it^  Gi,  w*.. 


LXTJWTJUCTIO.y. 


That  the  products  of  industry,  constituting  the  ■\vealtli  of  the 
world,  arc  not  distributed  among  the  producers  in  accordance 
with  the  efforts  expended  by  each,  in  their  production,  must  be 
apparent  to  ail  observers.  It  is  pliysically  impossible  that  a single 
individual,  however  industrious,  skillful,  or  economical,  can  pro- 
wealth  representing  a million  dollars;  yet  there  are  those  in 
j)Ossessiou  of  that  representing  many  millions;  a considerable  num- 
ber, more  than  ten  millions;  one,  it  is  said,  two  hundred  millions ! 

Current  theories  of  exchange  furnish  no  data  enabling  us, 
even  approximately,  to  estimate  the  amount  a single  individ- 
ual cfui  produce.  It  is  probable,  though  not  certain,  that  no 
single  wealth  producer  is  in  possession  of  one  hundred  thousand 
^ of  his  own  production;  but  this  opinion,  based  upon  no  well 
established  facts,  may  be  far  from  correct. 

^ An  analysis  of  the  theories  of  distribution,  shows  clearly  that 
, tlic  arguments  advanced  to  prove  their  legitimacy,  are  based 
, upon  false  premises.  Economists  prove  eonelu’sivcly  that  the  .sole 
0 factor  of  value  is  labor.  Then  assuming  that  exchanges  take 
emplace  in  accordance  with  the  relative  value  of  the  commodities 
exchanged,  they,  inadvertently,  perhaps,  allow  desires,  opportun- 
ities,  opinions,  and  even  deception  to  slip  in,  and  thus  value,  as  a 
t—  fixed  entity,  appears  to  have  n-o  existence.  Exchanges  taking 
^ place  according  to  the  theory  of  value  thus  modified,  must,  in- 

0 cvitably,  result  in  a gain  to  one  party  and  consequently  a lo«s  to 
5 the  other,  unless,  indeed,  the  desires,  opportunities,  opinions, 

1 and  deceptions  neutralize  each  other.  Even  if  these  interpolated 
c factors  do  not  favor  one  of  the  parties  at  the  expense  of  the  other, 
b the  real  nature  of  value  is  so  obscured  by  their  admission,  that 

^ its  existence,  as  a fixed  quantity  is  utterly  ignored;  therefore, 


4 


INTRODUCTION. 


in  exchanging  commodities,  their  relative  values  have  little  influ- 
ence in  determining  the  results;  each  party  simply  seeks  to  get  as 
much  as  possible  and  give  as  little  as  possible. 

Because,  in  the  business  world,  each  seeks  to  get  much  for 
little,  or  something  for  nothing,  superficial  observers  conclude 
that  such  is  the  nature  of  man.  In  a certain  sense,  this  is  true: 
in  its  broadest  sense,  the  one  intended,  it  is  not  true.  Naturally 
all  men  have  Certain  impulses  designed  by  the  Creator  to  secure 
their  self-interest;  each  has  a desire  for  food — a purely  animal 
desire.  This  desire  may  be  p6rverted ; it  is  then  an  evil.  Even 
though  normal,  the  desire  for  food,  in  obedience  to  the  higher 
nature  of  man,  may  require  restraint;  he  may  have  enough  for  a 
full  meal  while  another  is  starving;  under  such  circumstances,  to 
gratify  the  self-desire,  is  evil.  Henry  George,  a pre-eminently 
wise  economist,  has  well  defined  man  as  an  “animal  plus  some- 
thing more.”  This  “something  more”  has  the  sole  power  of 
preventing  the  perversion  of  human  desires;  none  of  them  can  be 
annihilated;  they  are  bestowed  upon  man  for  wise  and  beneficient 
purposes.  The  desire  for  food,  clothing,  shelter,  reputation,  char- 
acter— in  short  the  desire  for  wealth  and  happiness  is  not  merely 
innocent,  it  is  laudable;  it  needs  direction  and  restraint  by  that 
part  of  man  which  is  more  than  animal.  'Whether  this  restraint 
will  be  exercised  or  not,  depends  upon  tlie  development  of  the 
higher  and  nobler  nature  of  man.  Seeking  to  obtain,  by  exchange, 
more  than  is  given,  is  no  more  natural  to  man  than. is  theft;  both 
result  from  a desire  to  obtain  wealth  irres-peetive  of  the  rights  of 
others:  the  former  within  tlie  law:  the  latter  in  defiance  of  law : 
botii  in  defiance  of  natural  law,  from  which  there  lies  no  appeal. 
Such  is  the  nature  of  man  that  even  Uiejt  may  seem  a reputable 
means  of  securing  that  which  is  desired  ; the  laws  of  Ancient 
Sparta  encouraged  theft;  hence  stealing  was  tlie  common  practice 
of  the  Spartan  youtii.  ' He  must  not,  libweveP,  allow  hinlseif  to 
be  detected  in  the  act;  if  he  did,  he  lost  all  the  glory,  and  must 
suffer  punishment  for  his  want  of  shrewdness.  The  Spartan 
mother '■  wejit  when  her  son  returned  from  the  field  of  battle; 
while  she  wlrose  son  fell,  rejoiced;  The  Algerian,  whose  ancestors 
were  pirates  on  the  Mediterranean,  deems  himself  grievously 
wronged  in  being  deprived  of  his  inherited  right  to  live  as  his 
father  lived.  All  history  is  crowded  witli  facts  which  prove  con- 


INTRODUCTION. 


clusively  that  the  character  of  the  people  in  any  country  is  de- 
termined by  their  environments.  So  true  is  this,  that  knowing' 
the  environments  of  any  comir unity,  one  can,  from  these  data 
alone,  quite  accurately  describe  their  general  character.  Very 
little  reliance,  therefore,  can  be  placed  upon  any  theory  of  the  na- 
ture of  man,  drawn  from  the  practices  of  any  people.  The  in- 
vestigation must  not  stop  with  any  community  or  nation  now  ex- 
isting; it  must  be  carried  througli  all  the  history  of  the  past.  The 
history  of  the  past  and  the  experience  of  the  present  show  con- 
clusively, that  we  have  not  reached  that  high  stage  of  develop- 
ment beyond  which  there  is  no  higher.  If  any  theories,  eco- 
nomic or  otherwise,  are  assailed,  they  cannot  be  successfully  de- 
fended by  merely  saying,  “ Such  is  the  nature  of  man;  ” man  is- 
not  inevitably  what  we  are. 

From  erroneous  theories  of  value,  irresistibly  follow  errone- 
ous theories  of  profits,  interest,  rent,  wages,  capital,  and,  conse- 
quently, of  the  distribution  of  wealth.  However  much  the  re- 
sults may  be  deplored,  being  the  legitimate  fruits  of  current  theo- 
ries, they  must  be  borne  so  long  as  these  theories  ])ievail.  By 
united  efforts,  one  department  of  laborers  may  temj^orarily  cast  the 
burden  upon  others  ; but  this  will  not  rid  the  v;orld  of  the  evil;  it 
will  still  be  hovering  around  the  liomes  of  all.  The  rights  of 
none  are  secure  while  those  of  any  are  menaced.  “Am  I my  bro- 
ther’s keeper  has  been  derisively  asked,  not  by  Cain  alone,  but 
by  mankind  in  all  ages,  thus  indicating  that,  m tiie  public  estima- 
tion, individual  interest  is  independent  of  the  general  weal. 
Some  one  has  said  that,  if  an  Indian,  in  the  wilderness,  strikes 
his  squaw,  the  universe  feels  the  shock.  This  is  no  more  improb- 
able than  that  the  smallest  grain  of  sand  on  the  seaHiore,  detiects 
from  its  course,  the  most  distant  star.  Let  no  one,  tlierefore,  rid- 
icule the  thought,  that  a wrong  inflicted  upon  the  feeblest  and 
most  obscure  human  being,  is  an  injury  to  all  mankind. 

In  the  following  Essays,  I have  given  little  heed  to  economic 
theories  set  forth  in  the  exploits  of  Sinbad  the  Sailor,  or  in  the 
history  of  Aladdin-and  his  wonderful  lamp.  I have  chosen  rather  to- 
disregard  all  magical  schemes  for  accumulating  wealth,  and  by  trac- 
ing principles,  in  their  simplest  manifestations,  sought  to  elicit 
facts  by  which  to  determine  the  true  economic  relations  of  the 
wealth-producers.  The  arguments  of  economists,  in  general,  I 


INTKODUCTIOK, 


(J 


think,  justify  every  conelusion  that  I have  readied,  however 
much  at  variance  with  current  tlieories.  When,  after  proving 
with  mathematical  precision  that  labor  is  tlie  source  of  all 
wealth,  they,  by  the  mere  use  of  such  terms  as  ‘‘abstinence.'’ 
‘•sacrifice,”  “great  brain  powers,”  “ superior  executive  skill,” 
and  “ trustworthiness,”  attempt  to  justify  profits,  interest,  and 
rent,  irrespective  of  the  personal  services  rendered  by  the  recip- 
ient, I have  chosen  to  abide  by  their  arguments  rather  than  ac- 
cept contradictory  theories  ^citliout  argument. 

During  many  years,  I have  witnessed  struggling  humanity,  in 
all  stages  of  development,  striving  to  reach  a freer  and  nobler 
manhood.  My  own  experience  taught  me,  quite  fully,  to  realize 
its  trials,  its  hopes,  its  fears,  its  defeats,  and  its  victories.  As 
best  I could,  amid  many  discouragements,  but  full  of  hojic  in  the 
possible  achievements  of  humanity,  and  full  of  faith  in  the  jus- 
tice of  God,  I have  endeavored  to  assist  many  in  their  attempts 
to  surmount  tlie  difficulties  by  which  they  were  suriounded.  I 
feel  therefore  commissioned,  by  Experience,  to  speak  in  behalf  of 
the  struggling  millions,  whose  inalienable  rights  are  invaded  by 
economic  theories  at  war  with  the  best  interests  of  all. 

This  little  book,  my  mite  contributed  to  promote  the  general 
w'cal,  I send  fortli  on  its  mission,  trusting  that  its  suggestions 
may  furnish  facts  worthy  the  serious  consideration  of  all.  If  any 
believe  in  its  teachings,  let  them  act  accordingly;  if  any  do  not, 
let  them  refute  tlie  arguments,  or  forever  hold  tlieir  peace.  Fair, 
manly  criticism  by  any  who  study  it  with  care,  none  will  read  witli 
greater  interest  than  myself. 

D.  IT.  n, 

HOItXELT.SVILLli,  X.  Y. 


ESSAY  I 


VALUE  AND  PKOPEKTY. 

1.  Value.  Before  defining  u thing,  its  nature  mast  be  cloarir 
perceived.  The  definition  must  include  all  characteristics  of  the 
thing  defined,  and  exclude  those  belonging  to  anything  else.  The 
origin  of  value,  therefore,  must  be  determined,  before  a definition 
is  possible.  To  say  that  the  value  of  an  article,  is  some  other 
thing  for  which  it  will  be  taken  in  exchange,  is  to  say 
that  the  caprice  of  man  can  annihilate  or  restore  an  entity  at  will. 
The  indefiniteness  of  this  term  causes  the  arguments  of  political 
economists  to  lead  to  conclusions  not  warranted  by  the  facts.  If 
it  were  true  that  political  economy  has  no  more  substantial  founda- 
tion than  wants,  desires,  necessities,  opportunities,  or  opinions, 
it  would,  indeed,  be  a “ Dismal  Science,”  because,  thus  inter- 
preted, it  promises  nothing  but  pinching  poverty  to  the  great 
mass  of  mankind  so  long  as  time  shall  endure.  But,  fortunately, 
such  is  not  the  leaching  of  this  science;  these  dismal  forebodings 
result  from  a misapprehension  of  its  primary  facts. 

Each  science  has  its  own  peculiar  primary  facts,  or  axioms. 
Without  these,  no  reasoning  would  be  possible;  hence,  the  indis- 
pensable necessity  of  extreme  care  in  selecting  the  ])rcmises  upon 
which  all  conclusions  must  finally  rest.  The  geometrician  must 
perceive  that,  if  equal  quantites  be  added  to  equal  quantities,  the 
sums  will  be  equal;  if  equal  quantities  be  taken  from  equal  quan- 
tities the  remainders  will  be  etiual ; if  equal  quantities  be  multi- 
plied or  divided  by  equal  quantities,  the  results  will  be 
equal;  equal  powers  or  roots  of  equal  quantities  are  equal. 
These  arc  some  of  the  primary  facts,  or  axioms,  upon 
which  the  mathematician  confidently  relics;  without  tliese, 
mathematical  reasoning  would  be  impossible.  If  any  thing, 
not  a fact,  be  assumed  as  such,  in  reasoning  on  any  subject, 
this  false  assumption  must,  inevitably,  lead  to  a false  conclusion^ 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPlTAE  AND  DABOK. 


8 

Axioms  are  facts  so  simple  and  easily  perceived,  that  any  one 
'•whose  attention  is  called  to  them,  will,  at  once,  admit  them. 
They  are  not  susceptible  of  a demonstration,  because  there  are 
no  facts  simpler  than  themselves  with  which  they  may  be  com- 
pared ; they  are  self-evident  truths.  But  they  are  not  confined  to 
mathematics;  they  pertain  more  or  less  to  all  sciences. 

The  following  are  some  of  the  axioms  pertaining  to  political 
economy : The  air,  the  ocean,  the  light  of  the  sun,  in  fact,  the 
whole  material  universe,  and  all  the  forces  of  nature,  are  destitute 
of  value.  This  concession  necessitates  the  conclusion 
^that  value  inheres  in  nothing,  in  its  natural  state.  There- 
fore whatever  is  true  of  the  forces  of  nature,  and  the  material  un- 
iverse on  a grand  scale,  is  no  less  true  of  the  minutest  material  pro- 
duct of  nature.  Gold,  in  its  natural  state,  with  all  its  useful  proper- 
ties— brilliancy,  malleability,  ductilty,  homogeneity,  etc. — is  as 
valueless  as  a sunbeam  or  a drop  of  water.  The  truth  of  the  last 
proposition  is  not  generally  conceded ; it  cannot  be  without  a uni- 
versal wreck  of  current  theories  of  political  economy.  These  are 
venerable  relics  of  the  Ancient  World.  They  will  not  be  sur- 
rendered without  a struggle ; all  errors  diehard,  especially  those 
"hnary  with  years.  But  if  these  are  errors,  their  evil  results  are  so 
far-reaching  and  disastrous,  that  they  must  perish,  as  have  many 
others  no  less  hoary  with  age  than  are  they:  the  path  of  civiliza- 
tion lies  through  a grave-yard  of  ancient  customs,  no  more 
•vicious  than  are  many  which  dominate  the  world  to-day. 

If  any  number  of  people  were  cast  upon  some,  hitherto,  un- 
known island,  each  would  have  a right,  to  appropriate  to  his  own 
use,  any  product  of  nature  found  there.  Tliis  is  an  axiom ; all 
will  admit  it  without  debate  ; it  is  a primary  truth.  The  soil,  the 
forests,  the  rivers,  the  waterfalls,  the  precious  metals,  the  game, 
the  fish,  and  all  other  products  of  nature,  whatever  might  be  the 
'.jiiantity  or  quality  of  either,  would  be  as  destitute  of  value  as  are 
the  barren  wastes  of  Sahara,  Calling  natural  products  valuable, 
'is  mistaking  utility  for  value.  Each  of  these  terms  must  be  con- 
fined to  its  own  sphere,  or  inextricable  confusion  is  inevitable. 
L'tility  is  commonly,  if  not  always,  associated  with  value;  but  it 
:is  not  a factor  in  its  production.  This  is  proven  by  the  fact  that 
■ air,  though  of  inestimable  utility,  is  free  to  all.  The  same  is  true 
•of  sunlight  and  of  water.  There  are  many  other  things  that  are 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAFITAL  AND  LABOR.  " 

absolutely  indispensable  to  the  continuance  of  human  life,  and  are 
therefore,  infinite  in  utility,  though,  in  value,  they  are  zero.  So 
great  is  the  utility  of  iron  that  its  loss  would  arrest  civilization 
, and  fill  the  world  with  misery.  So  small  is  the  utility  of  gold  or 
diamonds  that  their  loss  would  be  scarcely  felt.  Yet,  iron  is  o.f 
little  value,  while  that  of  gold  and  diamonds  is  great.  Hence 
value  and  utility  are  not  identical ; neither  is  indispensrbly  neces- 
sary to  the  existence  of  the  other.  The  utility  of  anything  de- 
pends upon  certain  properties  adapting  it  to  useful  purposes.  GocT 
furnishes  utilities  infinite  in  variety  and  boimelless  in  extent. 
These  being  free  to  all,  each  can  appropriate  what  he  desires 
“ witl}out  money  and  without  price;”  hence  they  are-  without 
value. 

The  moment  human  activities  begin  to  modify  the  bounties 
of  nature,  a new  relation  arises.  If  a settler  in  the  new-found 
island  catches  a fish,  this  natural  product,  which  a moment  before 
was  free  to  all,  is  severed  from  the  common  inheritance,  and  an 
individual  right  results — a right  that  no  one  would  question. 
No  other  could  take  that  fish,  without  invading  the 
rights  of  the  fisherman,  the  owner.  If  another  should  catch  a 
deer,  his  individual  right  would  be,  at  once,  recognized.  The 
hut  erected  would  belong  to  him  whose  labor  constructed  it. 
The  cleared  plat  of  land  would  belong  to  him  whose  labor  im- 
proved it.  All  things  modified  by  human  industry  would  become 
private  property ; all  that  were  not  so  modified,  would  remain 
free  to  all.  That  which  is  modified  by  man  possesses  value ; that,, 
not  so  modified,  is  destitute  of  value.  The  former  is  salable  r 
the  latter  is  not.  Value,  therefore,  is  a relation  suhsistinrj  between 
the  laborer  and  the 'product  of  his  labor. 

In  the  production  of  value,  there  arise  new  relations,  and 
nothing  more.  Nothing  is  in  the  island  except  what  was  found 
there,  and  the  modifications  resulting  from  human  industry.  Yet 
there  are  new  relations  growing  out  of  human  efforts  that  consti- 
tute individual  ownership,  or  property,  x\.t  first,  no  one  to  the 
exclusion  of  others,  owned  anything;  hence  there  was  no 
property.  Each  could  rightfully  appropriate  to  his  own  use  any- 
thing he  found.  But  now  neither  can  take  that  which  another 
has  gathered  without  violating  the  right  of  private  property. 


10  CAl'SES  OF  THE  CONFLICT  BP^TWEEN  CAPITAL  AND  LABOR. 


Property  U the  right  of  the  Uiborer  to  exercise  dominion  over  the pro- 
duets  of  his  industry. 

It  is  nccc\ssary  here  to  observe  tliat  the  riglit  of  private  prop- 
erty is  not  the  creature  of  human  law;  no  liuman  law  can  create 
value,  no  human  law  can  annihilate  value;  it  is  an  individual  re- 
lation, as  inlienable  as  the  right  to  life  or  liberty.  If  the  involun- 
tary residents  of  the  supposed  island  remain  and  multiply,  each 
new-born  child  will  make  its  advent  there  clothed  with  all  tlie 
rigiits  possessed  by  the  original  settlers.  During  its  infancy,  its 
support  will  be  an  inherent  right  demanded,  in  the  nature  of 
things,  from  its  parents,  as  their  support  was  furnished  by  their 
parents.  The  future  accumulations,  for  all  time,  consisting  of  food, 
clothing,  shelter,  tools,  and  improvements  in  the  conditions,  will 
belong  to  those  wliose  labor  produces  them,  as  did  the  first 
meagre  gatherings  of  the  spontaneous  productions  of  nature  be- 
long to  those  who  gathered  them,  each  being  the  owner  of  the 
products  of  his  own  industry. 

The  fish  in  the  streams,  the  game  in  its  native  freedom,  the 
trees  in  the  forest,  the  unimproved  land,  the  minerals  in  their  na- 
tive bed,  the  'waterfalls,  and  all  other  products  of  nature,  have, 
and  can  have,  no  individual  owner;  in  this  condition,  unmodified 
by  human  agencies,  all  arc  as  free  as  air  or  sunlight.  Up  to 
this  time,  each  individual,  by  an  indisputable  right,  has  gathered 
at  will,  anything  he  desired,  limited  only  by  the  accumulations 
of  others.  If  they  so  desired  and  possessed  the  requisite  wisdom, 
they  might  continue  thus  to  live  forever,  with  boundless  oppor- 
tunities free  to  all.  But  so  great  wisdom  has  not  as  j'et  been  the 
lot  of  any  people ; hence,  the  necessity  of  government,  not  to 
create  rights,  but  to  protect  each,  as  near  as  may  be,  in  the  enjoy- 
ment of  his  own  inalienable  rights,  “to  life,  liberty,  and  thepursuit 
of  happiness.  ” Within  these  limits,  civil  government  has  its  legiti- 
mate functions  in  the  affairs  of  men;  outside  these  limits,  it  be- 
comes a positive  evil,  producing  discord  instead  of  harmony. 

For  and  among  themselves,  the  people  of  any  country  or  a 
majority  of  them,  may  prescribe  such  rules  and  regulations  as 
their  circumstances  demand.  These  constitute  their  government. 
But,  in  the  nature  of  things,  the  majority  arc  precluded  from  im- 
posing upon  the  minority,  even  though  that  minority  be  but  one, 
any  other  conditions  than  those  bearing  with  equal  force  upon  the 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR,  It 


majority  themselves.  It  is  the  part  of  government,  not  to  create 
rights,  \mt  to  protect  each  in  the  enjoyment  of  his  own;  hence, 
any  distinction  among  its  citizens,  on  the  part  of  any  govern- 
ment, is  a usurpation  that  sliould  be  met,  at  the  very  threshold, 
with  rebuke  so  strong  ,as  to  insure  no  repetition. 

A very  common  usurpation  on  the  part  of  governments  lurks 
in  the  theory  of  “ vested  rights.”  In  reality  all  riglits  arc  vested, 
that  is,  fixed.  Used  in  this  sense  the  term  is  legitimate,  at  least, 
harmless.  But  in  the  sense  in  which  it  is  frequently  used,  to  de- 
fend one  in  possession  of  that  which  is  wrongfully  acquired,  it  is 
fraught  witli  evil  under  wliose  infiucnce  the  world  reels  and 
shivers  from  social,  commercial,  and  political  convulsions.  In 
proof  of  this  fact,  witness  European  nations,  each  witli  sword 
and  shield,  ready  to  strike  another  or  defend  itself,  as  opportun- 
ity may  offer  or  necessity  demand.  Each  nation  is  a usurper  as 
to  the  rights  of  other  nations;  each  government  is  a usurper  as  to 
the  rights  of  its  own  citizens.  It  is  doubtful  whether  the  real 
title  to  a foot  of  European  soil  is  in  its  possessor;  its  possession 
can  be  defended  only  on  the  theory  of  “vested  rights,”  in  this 
sense,  a nonentity. 

The  time  of  vast  numbers  is  w'orsc  than  w^asted,  in  efforts  to 
defend  imaginary  rights,  vested  rights,  evoluted  from  ancient 
wrongs.  Even  worse  than  this,  the  great  mass  of  the  people, 
steeped  in  poverty  and  misery,  growing  out  of  these  “vested 
rights,”  yield  up  the  products  of  their  labor  to  support  the  count- 
less hordes  by  whom  their  poverty  and  degradation  are  perpetu- 
ated. What  is  true  of  Europe,  is  true  of  the  whole  Eastern  Con- 
tinent. Pretended  rights  have  been  allowed  to  usurp  the  place 
of  real  rights,  and  consequently  the  line  of  demarkation  between 
right  and  wrong  is  wholly  obliterated,  or  rendered  imperceptible 
to  the  people.  The  same  theories  prevail,  to  a certain  extent,  in 
tlie  United  States,  notwithstanding  the  boasted  exemption  from 
the  pernicious  principles  which  have  pauperized  the  great  mass 
of  the  people  of  Europe.  Had  the  American  people  carefully 
studied  the  history  of  the  causes  of  the  civil  war  recently  ended, 
these  theories  would  have  perished  in  that  conflict;  the  Rebellion 
was  the  legitimate  fruit  of  the  theory  that  one  may  rightfully 
live  in  idleness,  if  he  is  shrewd  enough  to  obtain,  within  the  let- 
ter of  the  law,  the  means  of  his  subsistence  at  the  expense  of  oth- 


12  CAUSES  OP  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


ers.  Notwithstanding  slavery  was  disarmed  on  the  field  of  battle, 
its  still  liven,  a menace  to  the  liberties  of  the  people. 

The  digression  from  the  discussion  of  the  nature  of  value 
and  the  origin  of  private  property,  became  necessary  from  the 
fact  that  ancient  customs,  however  vicious,  are  from  the  antiquity 
of  their  origin,  supposed  to  be  entitled  to  respect  as  precedents 
to  depart  from  which  is  little  less  than  treason.  One  of  the  most 
pernicious  of  these  is  the  theory  of  “vested  rights,”  wliich  has 
inspired  many  of  the  current  maxims  of  political  economy.  These 
would  have  perished  long  ago,  had  not  this  relic  of  barbarism 
presided  at  the  discussion. 

If  the  Island  upon  which  the  little  fragment  of  humanity 
was  supposed  to  be  cast,  was  so  limited  in  extent  and  resources 
as  to  furnish  mere  subsistence  to  those  already  there,  the  inhabi- 
tants miglit,  perhaps,  justify  the  expulsion  of  any  new-comers,  as 
<ii^her  of  two  men,  on  a plank,  in  mid-ocean,  might  justify 
•drowning  the  other  to  save  himself.  No  attempt  will  be  made 
here  to  decide  a point  so  fine.  There  may  be  those  whose  per- 
ceptive powers  are  equal  to  the  task  of  giving  certainty  to  such 
decisions;  it  is  believed,  however,  to  be  doubtful.  DidtheGreely 
Part}'',  on  the  verge  of  the  grave  fi’om  starvation,  become  canni- 
bals? If  they  did,  the  circumstances  must  be  fully  comprehended 
before  a correct  judgment  can  be  pronounced  upon  the  moral 
character  of  their  deeds.  There  is  probably  a limit  beyond 
which  the  human  mind  fails  in  capacity  to  trace  moral  relations, 
as  the  eye  fails  to  discern  physical  objects,  because  of  their  small 
size,  or  their  great  distance.  Whatever  may  be  the  facts  with  re- 
ference to  extraordinary  emergencies,  they  establish  no  precedent 
for  the  determination  of  the  moral  relations  in  the  ordinary  affairs 
of  men.  Monopoly  of  opportunities  cannot  be  justified  because 
of  the  remote  possibility  that,  sometime  in  the  distant  future, 
population  may  be  in  excess  of  the  means  of  subsistence. 

If  tlie  resources  of  the  Island  were  sufficient  to  sustain  a larger 
population,  any  later  immigrant  would  laud  there  clothed  with 
precisely  tlie  same  rights  possessed  by  the  first  settlers.  He 
would  have  an  inalienable  right  to  supply  his  wants  from  the 
spontaneous  productions  of  the  Island.  The  Islanders  might  unite 
their  forces  and  expel  him;  they  might  reduce  him  to  the  condi- 
tion of  a slave ; they  murder  him.  But  their  prior  occu- 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOU.  13 


paucy  could  justify  no  such  proceedings.  Opportunities  for 
gaining  sustenance,  and  securing  life,  liberty  and  happiness,  can- 
not, rightfully,  be  monopolized ; they  belong,  in  perpetuity,  to  the 
Race.  Should  the  equal  rights  of  the  new  settler  be  respected,  he 
must  be  permitted  to  gather  the  utilities  furnished  by  the  sponta- 
neous productions  of  nature,  as  freely  as  those  that  preceded 
him,  limited  only  by  the  prior  rights  of  others  to  the  commodities 
resulting  from  their  industry. 

Such  was  the  beginning  of  private  property.  Stripped  of  all 
false  theories  inherited  from  a barbarous  Past,  such  is  its  nature 
to-day,  and  such  it  will  remain  forever.  It  depends  for  its  exist- 
ence upon  neither  custom  nor  law;  it  is  older  than  either  of  them. 
It  does  not,  as  is  sometimes  said,  result  from  priority  of  possession 
merely;  it  results  from  industry,  and  from  that  alone.  The  first 
property  consisted  of  the  gifts  of  nature  merely  gathered  by  man. 
As  to  how  long  private  property  consisted  merely  of  the  unmodi- 
fied accumulations  of  the  spontaneous  productions  of  na- 
ture, history  is  silent.  That  such  was  the  nature  of  primitive 
property,  is  as  certain  as  is  the  fact  that  every  river  has  a source. 
The  right  of  the  fisherman  to  the  fish  caught  by  him,  needed  no 
legal  sanction. 

After  a time,  })rompted  by  his  desires,  the  environments 
forced  upon  man  the  fact  that  the  comforts  of  life  could  be  en- 
hanced by  tvariMformbig  the  material  products  of  nature,  thus 
■creating  new  utilities.  Instead  of  engaging  in  weaponless  contest 
with  the  wild  beasts  by  which  he  was  surrounded,  he,  perhaps, 
employed  a club.  He  saw  that,  for  many  purposes,  a stick  was 
better  than  his  fingers;  a stone  was  better  than  his  teeth;  he  be- 
eame  an  inventor.  He  saw  that  the  form  of  the  stick 
or  of  the  stone  is,  for  certain  purposes,  a very  important  matter. 
He  took  advantage  of  such  facts  to  increase  the  efficiency  of  his 
industry.  Unimportant  as  seem  the  rude  inventions  of  our  remote 
ancestors,  they  are,  nevertheless  the  beginning,  of  the  career  that 
has  resulted  in  the  wonderful  inventions  of  modern  times.  Indi- 
vidual right  to  the  new  utilities  grew  out  of  individual  efforts  in 
the  materials  of  nature,  as  primitive  property  grew 
out  of  ndividual  efforts  in  merely  accumulating  them.  Industry  is  a 
condition  precedent  to  ownership. 

As  has,  already,  been  said,  a fragment  of  gold  in  its  native 
bed,  though  possessed  of  potential  utility,  is  valuless.  Under 


14  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOll. 


such  circumstances,  a mountain  of  gold  would  be  as  destitute  of 
Taluc  as  would  a single  grain.  Value  is  not  a necessary  accom- 
paniment of  utility,  nor  of  quantity.  Utility  and  quantity  may  be 
indefinitely  increased,  value  still  remaining  at  zero.  Value  is  not 
found  outside  of  human  relations;  it  is  not  a product  of  nature. 
Its  nature  discloses  its  true  definition,  that  already  given  ; it  is  a ?•<?- 
latioii  subsisting  between  the  laborer  and  the  product  of  his  labor. 

There  is  no  possibility  of  overthrowing  this  definition  with- 
out admitting  the  legitimacy  of  extortion.  A misconception  of 
the  nature  of  ownership  leads  to  much  confusion  and  hideous 
monstrosities  in  economic  theories.  Ownership  results,  not  from 
legislative  enactments,  but  from  industry;  it  is  coterminous  with 
value;  the  limits  of  the  one  are  those  of  the  other.  Ownership- 
confei’s  no  right  of  extortion;  no  more  than  an  opportunity  con- 
fers the  right  to  steal.  It  is  true  that  the  owner  of  a commodit}', 
may,  in  case  of  the  extreme  necessity  of  another,  wrest  from  him 
a greater  value  than  is  given  in  exchange.  This,  however,  falls 
far  short  of  proving  that  ownership  can  increase  value.  In  this 
case  the  owner  extorts  pay  for  utility  instead  of  value;  the  latter, 
only,  is  his. 

To  recapitulate  the  facts  relating  to  value,  they  may  be  stated 
as  follows:  God  creates  utilities,  infinite  in  variety  and  bound- 
less in  quantity.  He  creates  no  value  except  through  human  in- 
strumentalities. Immediately  from  theliand  of  God,  a continent 
is  as  valueless  as  an  animalcule,  millions  of  which  can  sport  in  a 
drop  of  water.  Human  laws  can  create  no  values;  these  being 
individual  rights,  they  are  antecedent  to  all  legislative  enact- 
ments, whose  sole  function  is  to  preserve  rights.  Custom,  how- 
ever long  in  vogue,  being  merely  a species  of  law,  creates  no  val- 
ue. Its  only  source  is  individual  effort,  that  is,  labor.  God  fur- 
nishes all  the  materials  and  all  the  opportunities But  in  the 
fiat,  “In  the  sweat  of  tliy  face  shalt  thou  eat  bread,”  is  proclaim- 
ed the  economic  law  that  lnl)or  is  the  conditif)n  ])reccdent  to 
ownership.  From  this  decision,  sanctioned  by  reason  no  less 
than  Revelation,  there  lies  no  appeal. 

To  the  producers  of  value,  therefore,  belong  all  products  mod- 
ified by  the  hand  of  man ; those  net  so  modified  bedong  to  all  man- 
kind. The  former  alone  are  salable.  The  producer  may  exchange 
his  commodities  for  those  produced  by  others.  But  the  law  of 


CAUSES  OF  THE  CONFLICT  F.ETWEEN  CAPITAL  AND  LABOR.  15 

exchange,  like  that  of  value,  is  fixed  in  the  initurc  of  things,  no 
more  dependent  upon  the  caprice  of  custom,  than  is  the  force  of 
gravity,  whicli  imparts  weight  to  the  commodities  exchanged. 
The  laws  pertaining  to  political  economy  are  no  more  subject  to 
the  will  of  man  than  arc  tliosc  pertaining  to  astronomy. 

The  conclusions  reached  in  this  Essay,  as  to  the  nature  of 
value,  are  supported  by  the  arguments  of  all  economists.  The 
point  in  controversy  relates  to  the  estimation  of  its  quantity;  here 
there  is  a wide  divergence  from  current  theories.  Economists 
seem,  at  this  point,  to  entirely  lose  sight  of  its  nature  as  a fixed 
•entity.  Their  arguments  with  reference  to  the  laws  of  exchange, 
practically  ignore  the  existence  of  value,  by  assuming  that  its 
■quantity  depends  upon  the  desires,  necessities,  opportunities,  and 
relative  degrees  of  intelligence  of  tlie  parties  to  an  exchange.  This 
leads  to  inextricable  confusion,  and  makes  exchange  a mere  game 
of  chance,  in  which  the  passions  of  men,  instead  of  the  laws  of 
exchange,  are  ])ermittcd  to  determine  the  rights  of  the  parties. 
It  seems  to  be  forgotten  that  the  tramferables  consist,  • not  of 
utilities  or  commodities,  but  of  values.  The  utilities  or  commod- 
ities, are  inerehMucideiits  to  the  transaction;  the  values,  alone, 
are  to  be  estimated.  Tiiese  must  be  estimated,  not  by  relegating 
them  to  the  passions  of  men,  but  as  all  other  things  are  estimated, 
by  comparison  witli  a fixed  unit,  of  the  same  nature  as  that 
whose  quantity  is  to  be  determined.  The  nature  of  value  will  be 
more  fully  elucidated  in  the  discussion  of  the  laws  of  exchange, 
the  subject  of  a second  Essay. 


ESSAY  2. 

EXCHANGE,  PROFITS,  MEASURE  OF  VALUE. 

That  Providence  designs  that  men  should  exchange  services- 
is  proven  by  the  great  diversity  of  conditions  in  which  they  are 
placed.  Differences  of  climate  modified  by  latitude,  altitude,, 
and  remoteness  from  or  nearness  to  oceans,  lakes,  and  rivers;  dif- 
ferences of  soil,  adapting  the  Earth  to  the  production  of  a great 
variety  of  plants,  some  indispensable  to  the  support  of  life,  others 
.adding  greatly  to  the  comforts  and  well-being  of  man;  and  the 
distribution  of  minerals,  necessary  to  the  advancement  of  civiliz- 
ation, are  unmistakable  evidences  that  exchange  of  services  is  in- 
dispensable to  the  welfare  of  man.  The  material  products  of  na- 
ture, infinite  in  variety,  are  scattered  in  profusion  over  land  and 
sea,  more  than  the  desires  of  man  can  appropriate.  But  the  distri- 
bution of  them  generally  among  men,  is  impossible  except 
through  the  instrumentality  of  exchange.  The  diversity  of 
oceans,  lakes,  rivers,  mountains,  valleys,  plains,  fertile  soil,  sterile 
soil,  plants  adapted  to  different  conditions  of  climate  and  soil, 
and  the  great  variety  of  u.seful  minerals,  could  be  utilized  in  the 
highest  degree  in  no  other  way  except  through  mutual  services. 
Exchange,  therefore,  is  an  indispensable  factor  in  the  develop- 
ment of  a higher  civilization.  Annihilate  exchange,  and  civiliz- 
ation would  perish ; universal  barbarism  would  be  inevitable. 
Whatever  his  industry,  man  would  be  miserably  poor;  skill 
would  be  undeveloped;  mechanical  inventions,  beyond  the  rudest 
implements  of  the  savage  state,  would  be  unknown. 

Exchange  is  a potent  factor  in  the  development  of  skill. 
One  becomes  skillful  in  devoting  his  efforts  to  the  production  of  a 
limited  number  of  forms;  skill  is  the  product  of  numerous  repe- 
titions accompanied  by  careful,  intelligent  ob.servation.  It  will 
not  do,  however,  to  limit  the  field  of  one’s  exertions  to  a single- 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOll.  17 

uniform  movement;  the  healthful  development  of  both  body  and 
mind  requires  variety  enough  to  call  out  all  their  resources.  If 
too  little  be  required  of  them,  they  remain  undeveloped,  or  with 
unsymmetrical  relations;  if  too  much  be  required,  the  effect  is  no 
less  deleterious.  Given  the  materials  out  of  which  they  are  pro- 
duced, the  most  industrious  man,  in  an  attempt  to  produce,  with 
his  own  efforts,  all  the  objects  of  his  desires,  would,  with  undevel- 
oped skill,  live  and  die  in  poverty,  amid  the  monstrosities  of  his 
own  creation. 

If  intelligently  manipulated,  the  materials  and  opportunities 
furnished  by  nature,  are  exactly  adapted  to  man’s  highest 
welfare.  But  here,  as  everywhere,  man  is  left  to  determine,  by 
careful  observation,  the  true  relations.  If  he  mistakes  these,  the 
error  must  inevitably  render  unsafe  all  calculations  based  upon 
his  decisions.  The  evil  effects  will  be,  to  a certain  extent,  real- 
ized, though  the  cause  may  escape  detection.  Efforts  of  some 
kind  will  be  made  to  get  rid  of  the  unpleasant  conditions;  but 
they  will  be  made  in  vain,  unless  they  be  directed  to  the  removal 
of  the  disturbing  causes. 

The  development  of  man’s  powers,  physical  and  intellectual, 
requires  precisely  the  conditions  in  which  he  is  placed.  If  his 
desires  were  gratuitously  supplied,  he  would  be,  physically  weak, 
and,  intellectually,  a mere  animal,  a dwarfish  monstrosity.  The 
mistakes  from  whose  evil  effects  we  suffer,  then,  are  not 
ineradically  fixed  in  the  nature  of  things;  they  result  from  a mis- 
interpretation of  nature’s  laws.  They  are  remediable ; but  man, 
alone,  must  remedy  them.  The  responsibility  is,  therefore,  his. 

In  no  sphere  of  human  activities,  perhaps,  are  the  evidences  of 
folly  more  marked  than  in  current  theories  of  exchange.  Selfish- 
ness, alone,  is  assumed  to  be  the  inspiring  motive;  individual 
gain,  the  only  object.  Perception  of  mutual  welfare  prompts  the 
activities  of  neither  party.  Honesty  is  scoffed  at;  rascality  is  at  a 
premium;  veracity  is  evidence  of  imbecility;  vice  strides  almost 
unrebuked  in  all  the  marts  of  trade;  hopes  wither;  almost  univer- 
sal despair  reigns;  frequent  financial  panics  threaten  universal 
commercial  chaos;  and  starvation  menaces  the  homes  of  those 
w hose  industry  has  filled  the  world  with  wealth,  which,  if  properly 
distributed,  would  fill  the  Republic  with  prosperous  happy  homes. 

The  above  conditions  inevitably  result  from  the  adoption  of 


IS  CAUSES  OF  THE  CONFLICT  BETWEEN  CAFITAL  AND  LABOB. 

theories  inherited  from  an  age  when  brute  force  dominated  tlie 
affairs  of  men.  These  theories  set  at  defiance  the  teachings  of 
economic  science;  they  must  be  set  aside  before  better  conditions 
are  possible. 

Economic  science  teaches  that  the  rights  of  the  parties  to  an 
exclumge  of  commodities  m'Q fixed  in  the  law  of  value;  the  mines 
are  the  real  exchangeable  entities.  These,  alone,  determine  the 
relations  of  the  parties;  they  must,  therefore,  be  equal.  In  all 
equitable  exchanges,  value  received  equals  value  given.  This  is 
granted  by  most,  if  not  by  all,  economists.  But  do  the  current 
theories  of  exchange  agree  with  this  maxim?  Is  it  ever  applied 
in  practice?  Among  mere  business  men,  never ; the  very  existence  of 
such  maxim  is  ignored,  perhaps,  unknown.  They,  invariably, 
seek  to  get  more  than  tliey  give.  But  more  of  what  ? Gain  is 
undoubtedh’-  the  legitimate  object  of  exchange.  This  gain,  how- 
ever, if  justifiable,  must  be  secured  through  increase  of  utilities, 
instead  of  through  increase  of  value. 

If  profits  could  be  realized  only  through  increased  value,  they 
could  have  no  place  in  honest  exchange,  as  what  one  would  gain 
another  must  certainly  lose.  If  A give  B one  hundred  dollars  for 
a horse  worth  one  hundred  and  ten  dollars,  the  gain  of  tlie  former 
is  at  the  loss  of  the  latter;  what  is  added  to  the  wealth  of  the  one 
is  subtracted  from  that  of  the  other.  And  yet,  so  potent  is  the 
influence  of  custom,  this  monstrous  commercial  iniquity  is  toler- 
ated. even  commended,  in  this  last  quarter  of  the  Nineteenth  Cen- 
tury! This  is  the  source  of  that  appalling  public  opinion  which 
scoffs  at  the  suggestion  of  commercial  integrity.  Any  attempt  to 
justify  such  tiicory  of  profits  by  argument,  elicits  the  fact  that 
value  is  almost  universally  mistaken  for  utility.  Thus,  arguing 
from  false  premises,  the  conclusion  must  necessarily  be  false. 

If  A exchanges  with  B,  giving  a horse  for  an  ox  of  equal 
value,  both  may  gain  vastly  in  utilities.  Each  may  have  a horse 
and  an  ox,  and  neither  liave  a team.  After  the  exchange,  A 
will  have  a team  of  oxen,  and  B,  a team  of  horses.  Each  has 
gained  in  utilities,  but  neither  has  gained  in  value.  No  sophis- 
try is  necessary  to  justify  such  a transaction;  its  morality  is  ab- 
solutely unassailable.  In  the  sense  of  increased  value,  profits  are 
not  justified  by  the  laws  of  exchange;  in  the  sense  of  increased 
utilities,  they  arc  consistent  with  the  highest  integrity.  The 


i 

CAUSES  OF  THE  CONFIHCT  BETWEEN  CAPITAL  AND  LABOR. 

former  arc  properly  designated  as  sjmrious,  the  latter,  as  legiti- 
mate profits.  This  distinction  must  be  inexorably  maintained,  or 
the  future  offers  no  hope  to  the  toiling  millions. 

If  a hundred  families  should  settle  in  a hitherto  unoccupied 
country,  they  would  not  acquire  absolute  title  by  the  mere  act  of 
settlement.  They  might,  for  convenience,  assign  to  each  family 
the  occupancy  of  a particular  tract.  Such  action  however  could 
not  confer  upon  each  occupant  the  absolute  right  of  property ; 
the  settlers  would  not  be  precluded  thereby  from  making  a redis- 
tribution of  all  natural  products,  if,  in  their  judgment,  the  highest 
interests  of  all  demanded  such  redistribution.  The  relation  ef 
the  settler  to  what  his  industry  had  produced  would  be  very  dif- 
ferent; his  right  to  the  products  of  his  labor  would  be  absolute. 
If  a hundred  other  families  should  subsequently  seek  homes  in 
that  country,  justice  would  demand  a redistribution  of  all  natural 
products  unmodified  by  the  industry  of  the  previous  settlers. 
However  numerous  the  immigration  might  be,  each  would  rcacli 
that  country  with  the  inalienable  right  to  participate,  on  equal 
terms  with  the  prior  occupants,  in  all  the  bounties  of  nature.  It 
is  true  that  the  population  might  become  greater  than  could  be 
subsisted  in  the  country.  What  then  ? The  solution  of  the  prob- 
lem would  involve  the  same  principles  as  would  that  of  two  men 
in  mid-ocean  on  a plank  incapable  of  sustaining  both. 

Measure  of  Value.  As  the  bounties  of  nature  are  free,  anyone 
may  rightfully  appropriate  them.  Not  so  with  the  products  of  in- 
dustry; they  belong  to  those  whose  industry  produces  them.  The 
former  are  not  exchangeable;  the  latter  are  at  the  option  of  the 
owner.  But  he  is  not  at  liberty,  as  is  currently  asserted,  toyf.r  their 
value ; that  depends  upon  the  labor  expended  in  their  production.  It 
is  no  more  susceptablc  of  being  fixed  by  man,  than  is  weight,  color, 
magnitude,  or  chemical  properties.  The  value  of  anything  is  a 
definite  quantity  and  can  be  measured  only  as  such.  As  in  all 
other  measurements,  the  unit  of  measure  must  be  of  the  same  na- 
ture as  that  whose  quantity  is  to  be  measured,  A unit  of  weight 
must  be  used  in  measuring  weight;  a unit  of  length,  in  measur- 
ing length;  a unit  of  surface,  in  measuring  surface;  a unit  of 
volume,  in  measuring  volume;  a unit  of  value,  in  measuring  value. 
More  or  less  difficulty  is  encountered  in  selecting  the  measuring 
unit  in  all  kinds  of  measurements.  The  measuring  unit  of  value 


■20  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 

may  or  may  not  be  more  difficult  of  attainment  than  other  measur- 
ing units.  Difficult  or  not,  it  is  indispensable,  and  must  be  had, 
before  any  measurement  is  possible.  It  is  currently  asserted  that 
money  is  a measure  of  value.  This  is  not  true;  the  value  of 
money  is  as  unknown  as  is  that  of  the  commodities  whose  value  it  is 
supposed  to  make  known.  To  say  that  money  can  make  known 
the  value  of  commodity,  is  saying  that  an  unknown  quantity  be- 
comes known  by  comparing  it  with  an  unknown  quantitjL 

As  has  already  been  shown,  value  is  the  result  of  labor;  it  is, 
therefore,  evidently  proportioned  to  the  labor  expended  in  pro- 
duction. If  labor  were  not  of  various  degrees  of  efficiency,  the 
measuring  unit  would  be  easily  attainable.  If  all  labor  were  equally 
effective,  a day’s  labor  would  be  a perfect  unit  for  the  measurement 
of  the  value  of  all  commodities.  The  value  of  all  things  would  be- 
come known  by  simply  ascertaining  the  number  of  days’  labor 
expended  in  their  production.  Dividing  the  number  of  cords 
of  wood  chopped  by  a hundred  men  in  a day  by  100,  would  give  ap- 
proximately the  average  labor  expended  in  chopping  one  cord;  a 
simijar  experiment  with  one  thousand  men  would  furnish  a nearer 
approximation  to  the  average  result;  continually  experimenting 
with  a larger  number,  a result  would  be  attained  practically  re- 
liable. It  would  not  answer,  however,  invariably,  to  use  this 
standard  ; some  kinds  of  wood  are  more  easily  worked  than  others. 
For  a time  at  least,  the  standard  would  require  frequent  revision, 
as  do  all  other  schemes  of  man.  In  the  same  manner  could  be 
found  the  labor  cost,  or  value,  of  all  commodities.  Strength, 
skill,  and  persistency  present  other  difficulties;  but  they  are  not 
insurmountable  obstacles;  to  estimate  these  factors  of  production, 
requires  patient  observation.  But,  in  this  direction,  only,  is 
there  any  hope  of  commercial  equity,  and,  consequently,  of  gen- 
eral prosperity.  The  scheme  here  presented  for  estimating  val- 
ues, being  based  upon  labor,  the  sole  source  of  all  values,  is  im- 
measurably superior  to  the  current  method,  whose  antiquity  alone 
is  its  only  merit.  The  latter  has  divided  the  people  of  Europe 
into  two  classes ; the,  Jew  very  ricJi\  the  many  miserably  2>oor.  It 
promises  nothing  better  here;  it  must  be  discarded  or,  in  the 
neir  future,  this  will  become  a land  of  serfs. 

The  relative  amount  of  labor,  then,  expended  in  the  produc- 
tion of  exchangeable  commodities,  determines  their  relative  val- 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR.  21 


'-les.  If  twice  as  mucli  labor  is  re(iuired,  on  an  aA’^erage,  to  pro- 
duce a bushel  of  wheat,  as  is  required,  on  an  average,  to  produce  a 
bushel  of  corn,  a bushel  of  the  former  is  equal  in  value,  to  two 
bushels  of  the  latter.  Simple  as  it  is,  this  example  involves  all 
the  elements  found  in  the  most  complex  problem  of  exchange. 
In  ultimate  analysis  nothing  appears  but  an  exchange  of  services; 
these  are  the  only  salaliles  recognized  by  economic  law.  In  con- 
drmation  of  this  statement,  other  illustrations  will  now  be  given. 

A and  13  are  neighboring  larmers;  each  being  the  owner  of  a 
good  farm.  But  the  farms  are  not  equally  well  adapted  to  the 
production  of  all  kinds  of  grain.  A’s  is  especially  adapted  to  the 
production  of  wheat,  but  poorly  adapted  to  that  of  corn.  B’s  is  the 
reverse;  it  will  produce  corn  in  abundance,  but  to  the  growth  of 
wheat,  it  is  illy  adapted.  Here  the  mutual  interests  of  the  parties 
require  an  exchange  of  services.  Both  want  wheat;  both  want 
corn.  It  is  an  innate  principle  of  human  nature  to  seek  the  ob- 
ject of  the  desires  at  the  expense  of  the  least  effort  that  will  ac- 
complish the  result. 

If  A and  B are  sufficiently  wise  to  comprehend  their  mutual 
welfare,  each  will  direct  his  energies  to  the  production  of  that  for 
w'hich  his  farm  is  best  fitted.  One  hundred  days’  labor  expended 
Dn  A's  farm  will  produce  400  bushels  of  wheat.  If  one-half  the 
labor  w'ere  devoted  to  the  production  of  wheat,  and  the  other 
half  to  that  of  corn,  tlie  result  would  be  200  bushels  of  wdieat 
and  200  bushels  of  coni.  One  hundred  days’  labor  expended  on 
B’s  farm  in  the  production  of  corn  would  yield  800  bushels.  Had 
half  the  labor  been  expended  in  the  production  of  wdieat  and  the 
other  half  in  that  of  corn,  the  result  w'ould  have  been  400  bushels 
of  corn  and  one  hundred  of  wdieat. 

If  these  farmers  ignored  the  advantages  offered  by  exchange 
and  each  raised  both  kinds  of  grain,  A would  have  received  for 
his  100  days’  labor,  200  bushels  of  wheat  and  200  of  corn — total 
400  bushels;  B would  have  received,  for  his,  400  bushels  of  corn 
and  100  of  wdieat — total  500  bushels.  The  united  product  would 
have  been  900  bushels.  If  each  worked  on  his  owm  farm  produc- 
ing that  to  the  growth  of  which  his  w^as  best  adapted,  A would 
liave  produced  400  bushels  of  wdieat,  and  B would  have  produced 
-SOO  bushels  of  corn ; both  would  have  realized  1200  bushels. 
This  clearly  illustrates  the  advantages  of  exchange;  had  there  been 
no  thought  of  this,  the  two  wmuld  have  received  for  their  labor 


22  CAUSES  OP  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 

1)00  bushels  of  grain;  prompted  by  the  advantages  olfered  by  ex- 
change, they  would  have  received  1,200  bushels,  a proiit  of  three 
hundred  bushels. 

How  ought  these  profits  to  be  divided  ? This  question  is 
easily  answered.  xVssuming  that  the  farmers  have  labored  with 
equal  efficiency,  they  have  contributed  equally  to  the  production  of 
the  commodities;  the  products,  therefore,  should  be  equally  divid- 
ed. The  400  bushels  of  wheat  raised  by  is  exactly  equal,  in 
value,  to  the  800  bushels  of  corn  raised  by  B;  hence,  a bushel  of 
the  former  is  equal,  in  vaiue,  to  tvvo  bushels  of  the  latter.  Each 
would  then  have  400  bushels  of  corn,  and  200  bushels  of  wheat — 
600  bushels  of  botli  kinds.  A has  gained,  at  the  expense  of  no 
living  man,  200  bushels  of  corn;  B in  like  manner  has  gained  100 
bushels  of  wheat,  exactly  c()ual,  in  value,  to  A’s  200  of  corn. 
There  is  a mutual  gain  in  utilities,  the  only  gain  sanctioned  by 
economic  law. 

Had  the  productive  powers  of  the  land  differed  inconsequence 
of  latitude,  the  one  being  adapted  to  the  growth  of  wheat,  the 
other  to  that  of  cotton,  the  principles  would  have  been  precisely  the 
same.  The  climate  in  which  cotton  thrives  is  not  well  adapted  to  the 
production  of  wheat;  the  climate  in  which  wheat  nourishes, 
would  demand  herculean  efforts  in  the  production  of  cotton.  If 
those  in  the  cotton-belt  want  wheat,  they  can  obtain  it  by  grow- 
ing cotton  and  exchanging  with  those  whose  climate  is  adapted 
to  the  growth  of  wheat.  The  occupants  of  the  wheat  country 
might,  at  an  immense  cost,  in  an  artificial  climate,  grow  their  own 
cotton;  but  they  could  get  the  cotton,  with  a comparatively  in- 
significant outlay  of  labor,  by  raising  wheat  and  exchanging  with 
the  cotton-growers.  Under  these  circumstances,  the  advantages 
derived  from  exchange  are  inestimable. 

A third  and  not  less  important  advantage  gained  by  exchange 
results  from  the  skill  developed  by  a diversity  of  employments. 
As  already  stated,  one  becomes  skillful  by  directing  his  energies 
to  the  production  of  a limited  number  of  forms.  Hence,  a divi- 
sion of  employments  infinitely  increases  the  productive  powers  of 
labor.  Such  division,  however,  presupposes  the  opportunities 
offered  by  exchange.  Without  the  instrumentalities  of  exchange, 
each  must  depend  upon  his  individual  efforts;  division  of  labor 
would  be  unknown ; and  skill,  beyond  that  possessed  by  the 
rudest  savage,  would  be  undeveloped. 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOPv.  2o 

From  tho  mine  to  the  final  utilities  furnished,  iron  passes 
through  the  liands  of  a vast  number  of  artificers,  each  of  wiiom 
contributes  his  mite  to  swell  the  grand  total.  If  eacli  laborer 
should  attempt  to  perform  the  labor  required  in  all  the  transfor- 
mations and  transportations,  the  unlinished  product  would  re- 
main Avhen  he  ceased  from  his  labors  here,  and  passed  to  the  realms 
beyond.  This  is  typical  of  all  labor.  Tiiat  of  the  individual  is 
fruitful,  only  when  united  with  that  of  his  fellow-man. 

Should  the  hatter  make  shoes  for  himself  and  family,  a great 
deal  of  inefticient  labor  would  be  expended  in  producing  an  in- 
dustrial monst:osity;  one-tenth  of  the  time  expended  in  his  own 
field  would,  through  exchange  with  the  shoemaker,  sujiply  him 
with  infinitely  better  shoos.  Should  the  shoemaker  make  his  own 
hats,  waste  of  time  and  labor,  on  a practically  useless  product, 
would  be  the  inevitable  result.  What  is  true  in  relation  ro  the 
hatter  and  the  shoemaker,  is  universally  true;  not  because  some 
are  born  with  one,  and  others  with  different  special  capacities; 
but  because  the  necessities  of  production,  on  a grand  scale,  de- 
mand the  development  of  all  the  capacities  of  man. 

The  fact  that  one  is  a shoemaker,  or  a hatter,  does  not  prove 
that  he  had  superior  natural  capacity  in  that  field  of  labor;  his 
industrial  capacity  is  the  result  of  his  environments.  Hereditary 
differences  doubtless  exist;  but  the  theory  that  they  determine 
one's  avocation  in  life,  is  inconsistent  with  all  the  facts  of  history. 
If  heredity  had  the  influence  claimed  for  it,  no  skillful  mechani- 
cian would  inhabit  tlie  earth;  the  common  ancestors  of  all  were, 
probably,  savages — homeless,  weaponless,  toolless;  as  destitute  of 
mechanical  skill,  as  of  proficiency  in  mathematics. 

The  great  diversity  of  soil,  climate,  mountains,  plains,  val- 
leys, hydrographical  features,  and  mineral  facilities  imperatively 
demands  the  division  of  labor  and  exchange.  Economically, 
the  whole  world  is  but  one  people,  all  working  for  a common  ob- 
ject, the  general  welfare.  The  division  into  different  n.ationali- 
ties,  is  a mere  matter  of  expediency,  in  no  wise  altering  the  prin- 
ciples of  economic  law.  Unfortunately,  however,  all  nations, 
more  or  less,  throw  obstacles  in  the  way  of  the  harmonious  work- 
ing of  these  beneficient  provisions  of  nature.  Blindly  following 
ancient  customs,  at  war  with  the  best  interests  of  all,  instead  of 
heeding  the  simple  teachings  of  economic  science,  the  commer- 


24  CAUSES  OF  THE  CONP’LICT  BETWEEN  CAPITAL  AND  LABOR. 


cial  world,  even  in  this  age,  presents  the  phases  of  a state  of  war 
rather  than  those  of  peace.  Such  is  the  inevitable  result  of  vio- 
lating nature’s  laws. 

Money.  It  is  said  that  money  is  a measure  of  value.  Is  this- 
true  ? Does  it  comply  with  the  universal  requisite  that  the  unit 
of  measure  must  of  necessity  be  of  the  same  nature  as  the  quantity 
to  be  measured  ? By  applying  it  to  any  commodity,  is  the  value 
of  such  commodity  made  known  ? If  not,  is  it  in  any  sense  a 
measure  of  value  ? All  measurements  are  effected  by  comparison 
by  comparing  an  unknown  quantity  with  a known  quantity.  Is- 
not  the  value  of  money  as  much  an  unknown  quantity  as  is  that 
of  any  commodity  whose  value  is  to  be  determined  ? If  it  is  so., 
can  it  possibly  be  a measure  of  value  ? Certainly  not ; it  is  no 
more  a measure  of  value  than  is  a bushel  of  wheat,  or  any  other 
commodity.  As  has  already  been  shown,  value  is  not  a property 
of  anything;  it  is  a relation  of  the  producer  to  the  thing  produc- 
ed. Of  this  nature,  must  be  the  unit  employed  in  the  measure  of 
value;  such  unit  is  absolutely  indispensable.  In  the  true  eco- 
nomic sense  of  the  term  value  is  not  measured  by  money.  By 
immemorial  custom  money  has  been  universally  received  in  ex- 
change for  commodities.  This  has  led  to  the  erroneous  assump- 
tion that  values  are  thus  measured.  Its  general  acceptability, 
lenders  money  a very  efficient  instrument  of  exchange;  though 
tlie  common  misapprehension  of  its  proper  function,  frequently 
converts  it  into  an  engine  of  evil.  Its  real  nature  must  be  clearly 
perceived  in  order  that  its  use  may  result,  only,  in  good.  What 
then,  is  the  true  function  of  money  ? A correct  answer  to  this 
question,  requires  an  appeal  to  the  primary  facts. 

In  a primitive  community,  isolated  from  the  rest  of  the 
world,  there  would  be  no  money,  and  but  little  necessity  for  such 
an  instrument.  But  as  population  increased  and  spread  over 
more  extensive  feri'itory,  exchanges  would  multiply  and  the  sys- 
tem of  barter,  formerly  in  vogue,  would  be  illy  adapted  to  the 
new  conditions.  In  the  absence  of  money,  a farmer,  in  need  of 
a hat,  might  experience  great  inconvenience  in  obtaining  the  de- 
sired commodity.  The  hatter  might  not  need  anything  the 
farmer  had  to  exchange.  Or  if  he  did  need  the  farmer’s  products, 
he  might  not  have  use  for  just  that  quantity  equal,  in  value,  tc 
the  hat.  The  hatter  in  need  of  wheat,  would  experience  a simi- 


CAUSES  OF  THE  COXFUICT  BETWEEN  CAPITAL  AND  LAP>01L 


25 


lar  difficulty,  unless  he  could  find  a farmer  in  need  of  a hat.  In 
the  absence  of  the  hatter’s  desire  for  farm -products,  the  farmer 
must  remain  hatless,  seek  through  a series  of  exchanges  to  ob- 
tain something  desired  by  the  hatter,  or  resort  to  credit.  The 
shoemaker  might  want  the  farmer’s  wheat;  the  blacksmith,  the 
shoemaker’s  shoes ; and  the  hatter,  the  blacksmith’s  hammer.  If 
the  commodities  were  of  equal  value,  the  farmer  might  exchange 
the  wheat  for  the  shoes;  the  shoes  for  the  hammer;  and  the  ham- 
•mer  for  the  hat.  The  series  of  exchanges  would  frequently  be 
much  more  extensive  than  that  required  in  supplying  the  farmer 
with  his  hat;  the  difficulties  would  be  vastly  increased  by  tlie 
inequality  of  the  values  of  the  various  commodities.  So  great 
would  be  the  obstacles  in  the  way  of  exchanges  under  such  cir-.  ^ 
cumstances  that  commerce  on  an  extensive  scale,  would  be  impos- 
sible and  the  profits  derived  from  the  division  of  labor  could  not 
be  realized.  Such  was  the  emergency  that  led  to  the  invention 
of  money.  But  it  was  adapted  only  to  the  commercial  theories 
of  a barbarous  age — an  age  of  ignorance,  despotism,  and  slavery. 
It  vastly  increased  the  facilities  of  commerce,  but  it  lacked^  and 
still  lacks,  a very  essential  quality;  it  expresses  no  invariable  defi- 
nite meaning.  So  long  as  this  feature  is  wanting,  commercial 
prosperity  can  have  no  enduring  foundation. 

Current  commercial  theories  set  at  defiance  the  law  of  value. 
3Ioney  adapted  to  theories  of  exchange  which  sadly  need  revising, 
must  need  a corresponding  revision  itself.  With  or  without 
money,  commodities  can  not  be  equitably  exchanged  until  their  re- 
spective values  are  ascertained.  These  being  the  result  of  labor 
•expended  in  production,  can  be  determined  only  by  estimating 
the  forces  that  produce  them.  The  essential  elements  of  labor 
are  strength,  skill,  and  time.  The  divisions,  commonly  known  as 
skilled,  and  unskilled  labor,  are  misleading;  no  kind  of  labor  is 
possible  without  skill.  A skilled  laborer  is,  strictly  speak- 
ing, one  that  has  marked  proficiency  in  his  calling;  an  unskilled 
laborer  has  little  proficiency  in  his.  None  of  these  elements  must 
be  omitted  in  estimating  values.  The  efficiency  of  an  unskilled 
laborer  is  less  than  that  of  a skilled  laborer;  hence,  the  value  of 
a commodity  produced  in  one  day  by  the  former,  is  not  equal  to 
the  value  of  that  produced  by  the  latter  in  the  same  time.  The 
value  of  a commodity  produced  by  a given  grade  of  labor  in  a 
certahi  time,  is  double  that  of  one  produced  in  one-half  the  time 


3G  CAUSES  OF  THE  CONFLICT  UETWEEN  CAPITAL  AMU  LAliOE. 

by  the  Stun 0 grade  of  labor.  It  is  immeterial  as  to  tlie  kind  of 
commodities;  they  may  be  alike  or  unlike.  Both  may  be  ax- 
helves.  One  may  be  an  ax-helve ; the  otlier  a hand-sled.  One 
may  be  a watch;  the  other  a sewing-machine.  One  may  be  gold; 
the  other  diamond.  In  all  departments  of  production  and  ex- 
change, equal  values  result  from  equal  industrial  efficiency.  Cus- 
tom may  ignore  the  law  of  value,  but  it  is  eternally  fixed  in  the 
nature  of  things.  Legislators  may  interfere  with  its  beneficent 
tendencies,  but  they  can  no  more  change  tlie  law  than  tliey  can 
that  of  gravitation.  The  worshipers  of  Mammon  may  scoff  at  it, 
but  the  periodical  commercial  panics  will  be  cumulative  evidence 
of  their  folly. 

The  value  of  most  commodities  is  the  result  of  many  indus- 
tries. A lish  in  Lake  Erie  is  valueless;  from  the  hands  of  the  fish- 
erman it  is  accompanied  by  the  value  of  his  .‘•ervices;  it  readies 
the  market  loaded  with  the  additional  value  of  the  services  ren- 
dered in  traBsportation  ; it  goes  into  the  hands  of  the  consumer 
with  the  value  increased  by  those  rendered  by  the  dealer.  The 
ultimate  value  can  be  determined  only  by  ascertaining  that  result- 
ing from  the  services  of  all  parties;  these  must  be  paid  by  the 
consumer.  A barrel  of  flour  comes  from  Minnesota  loaded  with 
the  values  resulting  from  the  services  of  the  farmer,  the  miller, 
the  railroads,  the  drayman,  and  finally  reaches  the  consumer  with 
the  value  increased  by  the  services  of  the  grocer.  Every  one  of 
these  is  a legitimate  service  for  which  the  consumer  should  render 
an  equivalent. 

The  facts  already  elicited  show  the  absolute  necessity  of 
statistics  in  all  departments  of  production.  These  should  exhibit, 
substantially,  all  the  products  in  every  department  of  labor,  to- 
gether with  the  amount  of  labor  expended  in  production.  These 
two  facts  are  absolutely  essential  in  obtaining  the  average  value 
of  the  products  in  each  field  of  labor.  Suppose  that  a hundred 
days’  labor  produces  300  bifshels  of  wheat  and  that  an  equal 
amount  of  labor  produces  COO  bushels  of  oats.  Prom  this  it 
would  irresistibly  follow  that  three  bushels  of  wheat  or  six  bush- 
els of  oats  would  be  an  equivalent  for  one  day’s  labor.  The 
same  facts  show  that  three  bushels  of  wheat  is  equal  in  value  to 
six  bushels  of  oats;  hence,  two  bushels  of  oats  should  exchange 
for  one  of  wheat.  The  statistics,  being  absolutely  demanded  by 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAUITAL  AND  LAliOH.  27 

the  highest  interests  of  all,  should  be  secured,  printed,  and  dis- 
tributed periodically  by  the  government,  representing  the  inter- 
ests of  all  the  people.  This  suggestion  may  seem  utopian;  it  is 
not;  the  scheme  is  perfectly  practicable.  If  the  impracticable  is 
utopian,  the  current  theories  are  utopian;  they  are  not  only  im- 
practicable, they  make  the  attainment  of  the  desired  result  abso- 
lutel}^  impossible.  If  the  instrumentalities  of  government  can 
not,  at  ont;e,  be  utilized  for  that  purpose,  individual  producers 
might,  themselves,  secure  statistics  from  which  they  could  deter- 
mine, approximately,  the  relative  value  of  commodities  in  ex- 
change. By  this  method,  only  two  facts  are  rerpiired  in  relation 
to  each  held  of  labor ; these  are  the  amount  of  labor  expended 
and  the  quantity  produced;  approximately  both  are  easily  attain- 
able. The  method,  at  present,  employed  has  no  reliable  basis;  it 
leaves  the  result  to  be  determined  by  the  desires,  necessities,  op- 
portunities, and  relative  degrees  of  shrewdness  of  the  parties.  If 
this  scheme  does  not  bear  on  iis  face  positive  evidence  of  unrelia- 
bility, the  history  of  commerce  through  hundreds  of  3^ears,  over- 
Avhelmingly  proves  that  it  is  inconsistent  with  commercial  integ- 
rity. It  has  impoverished  the  masses  of  all  long-standing  nation- 
alities; unless  soon  discarded,  such  will  be  its  fruits  here. 

Bearing  in  mind  the  fact,  that  all  exchanges  consistent  wdtli, 
the  equal  rights  of  all,  are,  in  ultimate  analysis,  merely  exchanges  of 
services,  the  legitimate  functions  of  money  are  easily  apprehended. 
An  effort  wdll  now  be  made  to  make  clear  the  nature  of  this  indis- 
pensable instrument  of  commerce.  To  accomplish  this,  necessi- 
tates an  appeal  to  facts  that  none  can  question.  These  facts  can 
be  elicited  from  the  circumstances  of  the  nmst  primitive  commu- 
nity as  well  as  from  those  whose  commerce  is  wmrld-wide.  Com- 
mercial principles,  like  those  of  mechanics,  are  unchangeable. 
The  primitive  community  will,  therefore,  furnish  the  necessary 
facts,  and  much  less  to  distract  the  attention  of  the  reader.  To 
them,  then,  is  the  appeal. 

A laborer  works  for  a farmer  in  a new  country  destitute  of 
money.  The  farmer,  of  course,  cannot  jiay  money;  he  lias  none. 
But  he  has  received  a service  for  which  he  stands  debtor.  The 
laborer  may,  or  may  not,  desire  something  owuied  by  the  farmer. 
If  the  laborer  wants  butter  and  the  farmer  has  a surplus,  no  money 
is  needed.  The  exchange  is  direct;  the  laborer  receives  for  his 


28  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 

service  its  equivalent  in  butter.  If  the  fanner  has  nothing  desired 
by  the  laborer,  how  is  the  latter  to  be  compensated  for  his  workf 
In  the  absence  of  money  or  some  similar  instrumentality,  the 
farmer  might  exchange  with  a neighbor  and  thus  get  the  com- 
modity required  by  the  laborer.  The  difficulties  that  might  be 
encountered  here  have  already  been  pointed  out.  The  laliorer 
might  accept  something  the  farmer  had,  and  make  the  exchange 
himself.  The  difficulties  would  not  be  obviated  ; they  would  be 
merely  transferred.  A little  reflection  would  remind  the  farmer 
that  his  nQ\ghhoY'&  f requently  desire  his  commodities.  He  suggests 
this  fact  to  the  laborer,  who  at  once  recollects  that  such  are  in- 
variably the  conditions  in  all  communities.  So  far,  then,  there 
is  no  doubt.  If  an  honest  man,  the  farmer  has  invariably 
been  trusted  by  his  acquaintances.  At  once,  in  his  mind,  the 
cause  is  clear.  He  owes  the  laborer  one  day’s  labor.  He  writes 
the  following : 

“ Due  the  Bearer  one  day’s  labor.” 

Farmer. 

Would  not  this  pass  at  par  in  that  neighborhood?  Would 
not  the  very  first  person  having,  to  spare,  the  product  re- 
quired by  tlie  laborer,  exchange  it  for  this  evidence  of  tlie  farm- 
er’s indebtedness  ? Has  not  the  experience  of  all  been  the  same  ? 
In  this  respect,  all  communities  are  substantially  alike,  and  will 
be  forever.  The  common  weal  requires  a universal  exchange  of 
services.  Tliis  demands  that  the  money  employed  in  effecting  the 
exchanges  must  clearly  and  fully  express  the  relations  of  all  parties. 
For  this  purpose,  the  farmer’s  due  bill  is  immeasurably  better 
than  gold  and  silver.  It  does  not,  indefinitely,  express  an  obli- 
gation to  })ay  one  dollar;  the  obligation.is  to  pay  an  equivalent  for 
one  day’s  labor.  Systematic  business  imperatively  demands  that 
every  producer  must  keep  trace  of  all  labor  expended  in  produc- 
tion. If  the  comiriunity  in  Avhich  the  simple  little  due-bill  origi- 
nated  has  complied  with  this  re(piirement  of  exchange,  the  in- 
strument is  one  not  of  convenience  merely;  it  is  an  instrument  of 
justice.  The  holder  is  entitled  to  receive  of  the  fa-rmer  a com- 
modity produced  by  one  day’s  labor.  The  rate  of  exchange' is 
wholly  independent  of  the  desires,  necessities,  opportunities,*' or 
relative  degrees  of  shrewdness  of  the  parties.  If  the  laborer  had 
received  a dollar,  instead  of  the  due-bill,  all  future  exchanges 
effected  by  its  use  would  have  been  consummated,  perhaps,  only 


CAUSES  OF  THE  CO^’FLICT  BETWEEN  CAPITAL  AND  LABOIL  21) 

after  much  waste  of  time;  or  worse  still,  probably  at  a gain  to  one 
of  the  parties,  and,  of  necessity,  a loss  to  the  other.  Such  is  the 
character  of  money  throughout  all  Christendom  to-day ; such  it 
has  been  more  than  two  thousand  years.  Its  lack  of  intelligibility 
invests  it,  in  public  estimation,  with  magical  powers;  hence  the 
exchanges  of  industrial  products  effected  by  its  use,  are  a disgrace 
to  civilization.  The  farmer’s  due-bill,  to  which  allusion  has  been 
made,  though  lacking  one  very  essential  (piality  of  a universal 
medium  of  exchange,  is  infinitely  superior  to  any  money  based 
upon  present  theories.  As  a general  medium  of  exchange,  that 
instrument  lacks  the  feature  of  universal  acceptability;  it  is 
current  only  within  the  sphere  of  the  farmer’s  ac(puiintance. 

Still  confining  the  illustrations  to  the  conditions  of  a small 
community,  it  is  not  difiicult  to  add  to  the  local  currency  that 
feature  of  general  acceptability  reciuired  in  extensive  commerce. 
In  the  primitive  community,  the  due-bills  of  the  reputable  citizens 
would  be  accepted  in  exchange  for  goods,  or  in  payment  of  bal- 
ances. Under  such  circumstances  it  would  be  the  extremest  folly 
to  import  the  precious  metals,  to  serve  as  money  in  their  local 
exchanges.  Would  gold  or  silver  be  indispensable  in  effecting 
exchanges  with  other  communities^  They  would  not.  The  truth 
of  this  answer  is  susceptible  of  irrefragable  proof.  All  will  admit 
that  an  annihilalion  of  the  precious  metals  would  not  annihilate 
exchanges;  the  latter  are,  therefore,  not  inherently  dependent 
upon  the  former.  Whether  or  not  these  metals  are  a convenient 
medium  of  foreign,  exchanges,  is  quite  another  (}iiestion.  If  a 
community,  in  which  gold  is  not  found  could  exchange  with 
others  only  through  the  instrumentality  of  a gold  currency,  they 
could  not  exchange  at  all;  they  would  have  no  means  of  obtaining 
the  gold  except  in  exchange  for  their  products.  The  magical 
powers  of  the  precious  metals  exist  only  in  the  imagination. 
Values  in  relation  to  them,  are  subject  to  the  same  conditions  as 
those  relating  to  other  commodities;  they  are  proportional  to  the 
labor  expended  in  their  production.  Exchanges  will  arise  be- 
tween communities  as  between  individuals,  if  the  circumstances 
are  such  tliat  each  can  meet  the  desires  of  the  other  by  furnishing 
what  that, other  can  not  produce  for  itself;  or,  if  both  are  capable 
of  producing  the  same  kinds  of  commodities,  each  must  be  better 
adapted  than  the  other,  to  the  production  of  special  commodi- 
ties. In  the  former  case,  each  gets,  by  exchange,  what  he  could 


3^0  CAUSKS  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


not  produce  himself;  in  the  latter,  each  gets  more  cheaply  what 
he  might  produce  himself.  Communities  exchange  commodi- 
ties for  commodities;  philosophically  st>eaking,  they  exchange 
services  rendered  in  connection  with  the  commodities.  The 
money  used  for  this  purpose,  therefore,  should  be  evidence  of 
services  given  by  the  holder. 

The  due-bills  heretofore  mentioned  need,  for  greater  effi- 
ciency, a feature  which  is  indispensable  in  an  instrument  used  to 
elfect  exchanges  between  different  countries.  The  currency  of  such 
instruments  requires  that  those  who  issue  them  be  men  of  the 
highest  repute  and  generally  known.  The  imuractica- 
bility  of  the  latter  feature  is  a serious  defect  in  money  of  limited 
circulation ; it  is  fatal  to  its  use  in  effecting  exchanges  between 
different  communities.  The  lacking  feature  is  authenticity.  How 
can  this  be  supplied  ? 

In  a particular  community,  isolated,  commercially  from  the  rest 
of  the  world,  the  due-bills  issued  as  evidence  of  services  render- 
ed by  the  holder,  might  be  approximately  authenticated  by  the  en- 
dorsement of  all  through  whose  hands  thew  pass.  This,  if  not 
*impossible,  would  be  a great  inconvenience.  Tlie  endorsement  is 
properly  a function  of  government,  as  it  is  a matter  of  much  import- 
ance to  the  whole  people.  All  legitimate  governmental  authority  is 
derived  from  the  people,  whose  welfare  is  its  only  object.  The 
government  of  a small  community  might  be  a pure  democracy, 
the  legislature  consisting  of  the  whole  people.  'Whether  the 
government  be  simple  or  complex,  its  money  requires  public  en- 
dorsement to  give  it  that  authenticity  demanded  in  a matter  of 
sucli  vast  importance  to  tim  general  weal.  The  government  can 
no  more  value  than  it  can  create  weight;  it  can  authenti- 

cate instruments  for  measuring  weight;  it  can  give  authenticity 
to  evidences  of  value. 

In  a small  community  whose  government  h simple,  the  in- 
struments of  exchange  might  receive  public  endorsement  through 
agents  appointed  for  that  }mrp;o.se.  Tirese  might  be  authorized 
to  exchange  the  public  credit  for  that  of  individuals,  under  such 
restrictions  as  would  iirsurc  }).erfect  safety.  The  agents  of  the 
people  should  be  authorized  to  cxctmnge  the  public  for  individ- 
ual credit,  on  well  defined  principles,  and  to  a limited  extent, 
only.  Tlie  individuai  currciiey  should  be  issued,  not  exceeding 


CAUSES  OF  THE  CO^'FLICT  IlETWEEX  CAPITAL  AND  LABOR.  81 

a small  per  cent,  of  the  individual  property,  and  never  without 
service  rendered  by  the  recipient.  The  essential  characteristic  of 
money  is,  that  it  represents  service  given  by  the  holder,  for 
Avhich  he  is  entitled  to  an  equivalent.  Therefore,  logically,  ser- 
vice is  an  indispensable  condition  precedent  to  the  rightful  pos- 
session of  money.  It  will  be  observed  that  the  services  required 
of  the  agents  having  charge  of  the  public  credit,  are  substantially 
the  same  as  those  now  rendered  by  banks;  hence,  nothing  new 
would  be  required,  in  ascertaining  the  responsibility  of  those 
wishing  to  exchange  their  individual  credit  for  that  of  the  public. 
Stripped  of  all  the  mysteries  with  which  false  theories  of  value 
and  exchange  have  invested  it,  such  is  the  nature  of  paper 
money.  If  constructed  in  harmony  with  economic  principles, 
and  duly  authenticated,  it  is  competent  to  effect  all  the  exchanges 
of  a world-wide  commerce,  crossing  unchallenged  international 
lines,  and  arrested  only  by  the  limits  of  civilization  itself. 

The  principles  of  a metallic  currency  ore  identical  with  those 
of  a paper  currency.  The  function  of  gold  used  as  money,  is  pre- 
cisely the  same  as  that  of  paper,  used  for  the  same  purpose.  A* 
an  instrument  of  exchange,  paper  represents  service  given  by  the 
holder;  used  for  the  same  purpose,  gold  represents  the  same  fact. 
A precedent  service  is,  therefore,  indispensable  to  the  validity  of 
either.  All  notions  of  the  magical  powers  of  gold  are  handed 
down  from  a barbarous  age,  along  with  theories  of  exchange  har- 
monizing with  those  pertaining  to  human  rights  in  general.  The 
governed  were  supposed  to  have  no  rights  which  the  rulers  were 
bound  to  respect.  The  superstition  of  the  ignorant  masses  was  a 
potent  factor  in  the  governments  of  those  times.  Ignorant  of 
their  own  rights  and  duties,  as  well  as  of  those  in  authority,  the 
people  imagined  that  the  rulers  were  sustained  by  super-human 
power.  Hence,  in  the  estimation  of  the  people,  governors  were 
more  than  mortal.  The  love  of  approbation  is  inherent  in  human 
nature;  each  individual  desires  the  respect  of  his  fellows.  In  an 
ignorant  age,  this  is  secured  through  manifestations  of  physical 
power  and  visible  personal  adornments.  The  object  of  these 
adornments  being  to  distinguish  the  person,  they  must  be  of  va- 
rious kinds;  otherwise  they  would  have  no  significance.  By  this 
standard,  superior  worth,  in  the  public  estimation,  would  attack 
to  him  whose  personal  adornments  consisted  of  things  beyond 


i2  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 

the  reach  of  the  people  in  general.  To  secure  this  pre-eminent 
distinction  it  was  necessary  to  select,  as  the  badge,  material  in- 
accessible to  the  masses  of  the  people.  This  is  pre-eminently  the 
characteristic  of  what  are  known  as  precious  metals  and  precious 
stones.  In  ancient  times,  the  people  were  not  allowed  to  appropri- 
ate these ; they  belonged  to  the  king,  who,  according  to  the 
moral  code  of  that  age,  conferred  upon  his  favorites  the  sole  priv- 
ilege of  gathering  them.  Of  course,  it  was  an  age  of  slavery  in 
which  the  work  was  carried  on  under  the  lash  of  a master.  Those 
diat  possessed  them,  tlierefore,  held  the  evidence  of  superior 
physical  power,  the  sole  evdience  of  superior  worth  in  a barbar- 
ous age.  Such  is  the  origin  of  the  theory,  that  by  some  myste- 
rious process,  the  precious  metals  and  precious  stones  have  power 
to  confer  dignity  upon  their  possessor!  Preposterous  as  is  this 
theory,  it  still  prevails  in  this  country,  a memento  of  the  false 
pretense  that  slavery  perished  amid  the  ruins  of  tlie  ‘‘Southern 
Confederacy.”  The  institution  of  slavery,  indeed,  went  down 
with  the  Confederate  dag;  but  the  si^irit  which  animated  it  still 
dominates  all  tlie  marts  of  trade.  All  notions  of  the  magical 
powers  of  the  precious  metals,  inherited  from  barbarous  ages, 
must  be  discarded,  before  their  use  as  money,  can,  with  any  tol- 
erable degree  of  equity,  result  in  distributing  the  products  of 
industry  among  those  whose  labor  produces  them.  Even  then, 
it  is  not  improbable  that  paper  money  based  upon  correct  theories 
of  exchange,  is  preferable  to  a currency  of  gold  and  silver.  It  is 
that  a currency  consisting  of  both  would  be  preferable : 
but,  if  either  should  be  used  to  the  exclusion  of  the  other,  the 
-paper  money  has  uiost  to  recommend  it  as  an  exclusive  currency. 

Assuming  that  the  wonderful  powers  commonly  ascribed  to 
the  precious  metals  are  purely  imaginary,  what  preliminary  facts 
are  essential  to  the  construction  of  a metallic  currency  adapted  to 
correct  theories  of  exchange  ? The  drst  unquestionably 
relates  to  the  value  of  the  metal.  This,  again,  requires  statistics 
as  to  the  amount  produced  and  the  labor  expended  in  production; 
these  are  absolutely  indispensable.  Gold  or  silver,  like  other  sub- 
stances, becomes  valuable  only  through  labor.  Two  facts,  only, 
are  essential  in  determining  the  value  of  either;  neither  fact  is 
difficult  of  attainment.  A small  fraction  of  the  time  and  expense 
‘given  in  attempts  to  adjust  the  metallic  currency  to  present 


C.VUSES  OF  THE  CONFLICT  BETWEEN  CAPLTATi  AND  liABOR.  33 


theories,  would  furnish  the  facts  requisite  to  place  the  medium  of 
exchange  upon  a basis  as  intelligible  as  that  of  weights  or  meas- 
ures. Instead  of  sending  commissioners  abroad,  on  a fruitless 
errand,  as  has  b(’en  done  in  attempts  to  reconcile  the  irreconcil- 
able theories  of  international  currency,  let  Congress  appoint  a 
commission  to  gatlier  statistics  relating  to  the  product’on  of 
gold  and  silver,  and  thus  secure  a reliable  basis  to  support  the 
national  metallic  currency.  A properly  constituted  national  cur- 
rency, is  perfectly  adapted  to  all  the  requirements  of  international 
exchange.  i\.s  in  all  other  departments  of  labor,  the  ultimate 
fact  to  be  elicited  is  the  average  product  of  a given  amount  of 
industry.  If  both  gold  and  silver  are  to  be  used  as  money,  statis- 
tics are  required  from  all  regions  producing  these  metals.  In 
this  manner,  only,  is  it  possible  to  give  intelligibility  to  a me- 
tallic curren(;y.  Suppose  the  statistics  show,  that,  on  an  average, 
one  day’s  labor  produces  100  grains  of  gold;  and  the  same 
amount  produces  1,600  grains  of  silver.  From  this  it  would  fol- 
low that  100  grains  of  gold  or  1,600  grains  of  silver  is  an 
equivalent  for  one  day’s  labor;  also  that  one  grain  of  gold  is 
equal  in  value  to  16  grains  of  silver. 

Laying  aside  all  prejudices  resulting  from  theories  inherited 
from  the  dismal  past,  is  not  the  theory  of  metallic  currency  above 
suggested  immeasurably  superior  to  that  sanctioned,  only  by  im- 
memorial custom  ? In  the  light  of  these  facts,  is  it  not  the  height 
■of  absurdity  to  send  agents  abroad  to  make  an  agreement  as  to 
the  rate  at  which  gold  shall  exchange  for  silver  '^  If  the  repre- 
sentatives of  all  nations  should  meet  at  Paris  and  declare  the 
French  meter  equal  to  one  yard  and  a half,  the  very  school-boys 
would  laugh  at  their  folly.  The  relative  magnitude  of  two 
measures  is  ri.xed  in  the  nature  of  things;  so  it  is  w/th  the  rela- 
tive value  of  two  metals.  A universal  medium  of  exchange 
would  undoubtedly  greatly  facilitate  international  exchanges; 
but  it  is  unattainable,  without  a universal  abandonment  of  current 
theories  of  value.  If  the  assembled  agents  of  all  nations  were 
supplied  with  the  proper  statistics  relating  to  mineral  produc- 
tions, and  vverc  inspired  by  a correct  theory  in  manipulating  them, 
there  would  be  no  discord  in  their  councils ; a simple  arithmet- 
ical operation  would,  at  once,  settle  the  point  at  issue.  It  must 
be  remembered,  that  economic  princi[)les  are  universal  and  im- 


34  CAUSES  OP  THE  COMPIUCT  BETWEEN  CAPITAL  AND  LABOR. 


mutable;  no  reliaace  cau  be  placed  oti  theories  of  exchange  in- 
consistent with  these;  therefore  money,  the  instrument  of 
exchatige,  must  comply  with  the  requirements  of  economic  law. 

With  the  necessiry  statistics  before  them,  Congress  could 
proceed  intelligently  in  constructing  a metallic  currency  inlinitely 
superior  to  that  at  present  used.  The  one  in  present  use  is  wholly 
unintelligible.  What  is  a dollar  ? “ One  hundred  cents.”  What 

is  a cent?  . Absurd  as  it  appears,  this  represents  the  popular 

notion  of  the  metallic  monetary  unit.  But  what  w a gold  dollar? 
“ 25  4-5  grains  of  standard  gold.”  This  answer  expresses  the 
material  and  the  weight  of  the  gold  dollar;  but  no  information  is 
given  as  to  its  value.  No  one  knows  its  value;  this  feature  is  as 
unknown  as  is  that  of  wheat,  lead,  corn,  hats,  or  any  other  com- 
modities. Yet  it  is  said  that  this  bit  of  metal  is  a measure  of 
value!  Its  weight  is  known;  its  value  is  unknown;  it  might, 
therefore,  be  used  in  measuring  tlie  former,  but  it  can  no  more 
measure  the  latter  than  it  can  the  llavor  of  butter.  If  one  ex- 
changes a bnshei  of  wheat  for  a g )ld  dollar,  it  is  said  that  the 
relative  values  are  determined  by  the  operation.  This  is  not 
true;  nothing  is  settled  except  that  the  owner  of  the  dollar  pre- 
ferred the  wheat  to  the  dollar,  and  the  owner  of  the  wheat  preferred 
the  dollar  to  the  wheat:  the  desire  of  the  former  for  wheat,  was 
stronger  than  his  desire  for  gold;  the  desire  of  the  latter  for  gold, 
was  stronger  than  his  desire  for  wheat.  Desires  are  far  from  iden- 
tical with  value;  neither  of  them  can  measure  the  other;  there  is 
not  a particle  of  similarity  between  them.  If,  on  an  average,  the 
labor  expendeil  in  producing  a bushel  of  wheat  is  equal  to  that 
expended  in  producing  the  gold  in  a dollar,  the  value  of  the 
former  is  equal' to  that  of  the  latter.  The  gold  or  silver  coin, 
therefore,  should  have  impressed  upon  it  its  labor-cost. 

If  the  average  amount  of  gold  produced  in  a day  is  100 
grains,  these  are  the  essential  facts  to  appear  on  the  coin.  A 
similar  coin  weighing  50  grains  would  e(|ual  in  value  one-half 
day’s  labor;  one  weighing  25  grains  would  represent  one-quarter 
of  a day;  one  of  10  grains  would  represent  an  hour,  a day  being- 
ten  hours.  Money  constituted  as  here  suggested,  would  be  free 
from  all  mjstery ; would  be  perfectly  intelligible;  and  would  be 
in  harmony  with  economic  law.  Every  coin  would  represent  a 
definite  service  rendered  by  the  holder,  thus  complying  with  the 


CAUSES  OP  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR.  35 


indispensable  requisite  of  all  instruments  of  exchange.  If  silver 
coins  are  also  used,  they  must  express  the  same  facts;  the  rela- 
tive value  of  gold  and  silver  coins  of  the  same  denomination 
depends  entirely  upon  the  relative  cost  of  producing  these  metals. 
If,  on  an  average,  sixteen  times  as  much  labor  is  required  to  pro- 
duce a given  quantity  of  gold  as  in  producing  an  equal  quantity 
of  silver,  this  determines  the  relative  weight  of  the  coins.  If  100 
grains  of  gold  represent  a day’s  labor,  1,600  grains  of  silver  rep- 
resent the  same  fact. 

From  the  preceding  discussion,  it  is  seen  that  money  is  an 
inestimably  convenient  instrument  of  exchange.  It  represents 
service  given  by  the  holder;  but  it  does  not  measure  value.  Any- 
thing that  performs  the  function  of  money  is  money.  It  may 
consist  of  paper,  gold,  or  silver;  it  might  consist  of  wheat,  iron, 
lead,  or  any  other  product  of  labor.  The  material  used  is  a mat- 
ter of  mere  expediency.  Much  labor  is  required  to  get  gold  and 
silver;  hence,  a small  quantity  of  either  of  these  metals  expresses 
a value  equal  to  that  of  a large  quantity  of  other  products  of  in- 
dustry. These  metals  will  not  rust;  hence,  they  will  last  a long 
time.  They  are  susceptible  of  being  divided  without  loss.  They 
are  easily  stamped.  Tney  possess  numerous  other  properties  of 
utility  which  makes  their  possession  desirable;  but  these  have 
nothing  to  do  with  their  monetary  character.  Of  all  substances 
paper  is,  perhaps,  the  most  convenient  material  for  money.  If 
based  upon  correct  theories  of  exchange,  it  is  probable  that  an 
exclusively  paper  currency  would  answer,  perfectly,  all  demands 
of  the  most  extensive  commerce.  Its  exclusive  use  would,  at 
least,  forever  rid  the  world  of  the  nightmare  superinduced  by  the 
magical  powers  with  which  the  superstition  o^‘  a barbarous  age 
invested  the  precious  metals.  The  notion  that  gold  or  silver  is 
the  only  real  money,  is  a relic  of  that  age  in  which  nations  waged 
war  for  the  possession  of  these  metals,  then  supposed  to  consti- 
tute the  only  real  wealth.  Of  whatever  material  the  money  be 
composed,  it  must  express  simply  the  fact  of  service  given  by  the 
holder,  and  the  amount  of  such  service. 

Becapitulation,  The  diversity  of  soil,  climate,  hydrograph- 
ical features,  mineral  productions,  and  relief  of  country,  offers  a 
great  variety  of  opportunities,  to  utilize  which,  for  the  common 
weal,  requires  exchanges  among  all  the  producers  throughout  the 
world.  The  di'.  ision  of  labor  demanded  in  producing  t’;e  great 


3G  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LA  BOB. 


variety  of  commodities  required  to  satisfy  the  desires  of  all,  is  t 
second  potent  factor  inducing  men  to  trade.  The  skill  developed 
in  the  various  departments  of  industry,  is  a third  factor,  of  won- 
derful power  in  the  production  of  wealth.  A commerce  based 
wholly  upon  these  conditions  would  be  a blessing  to  all  mankind  ; 
instead  of  being  divided,  as  at  present,  into  winners  and  losers, 
all  would  be  gainers. 

The  legitimate  gains  are  not  in  values;  they  are  in  utilities. 
A gain  in  value  implies  a loss  to  one  of  the  parties;  it  violate.s 
the  economic  maxim  that  service  given  must  equal  service  re- 
ceived. A gain  in  utilities  implies  no  loss  to  either  party ; in 
these,  both  are  gainers,  not,  perhaps,  invariably,  but  generally. 
The  latter  are  the  only  legitimate  inducements  to  exchange. 

Whatever  may  be  the  commodities  exchanged,  the  real 
exchanges  are  in  services;  this  is  no  less  true  amid  all  the  com- 
plexities of  modern  commerce  than  it  was  when,  in  early  times, 
the  hunter  exchanged  with  the  fisiierman. 

Profits  secured  through  increased  utilities  are  legitimate; 
those  secured  through  increased  values  are  spurious.  Allowing 
the  latter  to  usurp  the  place  of  the  former,  has  obliterated  all 
mo7'al  distinction  between  exchange  and  gambling.  Vain  is  the 
hope  to  rid  the  world  of  the  effect,  except  through  the  removal 
of  the  cause.  Until  this  is  accomplished,  the  lucky  few  will  live 
in  ignoble  splendor,  surrounded  by  the  luckless  many,  whose 
services  have  reared  the  palaces,  in  which  luxurious  Idleness 
mocks  the  miseries  resulting  from  unrequited  industry-.  Such  is 
the  penalty  attached  to  the  violation  of  economic  law;  its  princi- 
ples are  inexorable.  z 

Money  is  not  a measure  of  value;  it  is  an  instrument  to  facili- 
tate exchanges.  Its  function  is  to  represent  a service  rendered 
by  the  holder.  Hence,  service  is  an  indispensable  condition  pre- 
cedent to  the  legitimate  possession  of  money.  The  money  in 
pi’esent  use  lacks  a very  important  feature  of  a perfect  instrument 
of  exchange;  it  represents  no  definite  value.  Whatever  evil  has 
resulted  from  its  use,  is  attributable  to  this  fact. 

The  only  difficulty  in  the  way  of  constructing  a perfect  in- 
strument of  exchange  is  prejudice — ^a  formidable  obst-acle,  but 
not  insurmountable.  Let  all  notions  of  the  indispensable  necessity 
of  tlie  precious  metals  be  discarded,  and  the  necessary  statistics 


CAUSKS  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LA!JOK.  37 


be  obtained  and  utilized  in  accordance  with  the  legitimate 
theories  of  exchange,  and  the  material  used  as  a currency  will  be 
a mere  matter  of  convenience.  It  may  be  gold  and  silver,  or  paper; 
it  may  be  all  these.  In  any  event,  exchanges  will  be  ellected 
mostly  through  the  instrumentality  of  a paper  currency,  in  the 
form  of  due-bills,  notes,  checks,  and  drafts;  these  lacking  merely 
the  feature  of  authenticity  required  in  a universal  instrument  of 
exchange. 

The  treasury  notes,  known  as  green-backs,  slightly  modified, 
would  answer  all  the  requirements  of  commerce,  both  domestic 
and  foreign.  The  modification  demanded  is  that  they  should 
express  service  rendered  by  the  holder  for  which  the  nation  is 
bound  to  render  an  equivalent;  until  this  is  done,  the  obligation 
is  not  discharged.  This  requires  that  the  holder  of  a green-back 
receive  an  exact  equivalent  for  the  service  rendered  by  him  as 
expressed  in  the  instrument  of  exchange.  This  not  being  defi- 
nitely expressed  on  the  face  of  the  green-back,  is  a fatal  defect  in 
that  instrument.  Let  a definite  amount  of  service  take  the  place 
of  the  term  dollar,  and  the  money  is  complete ; all  the  mysteries 
of  money  will  disappear;  and  it  will  be  used  merely  as  a medium 
of  exchange,  instead  of  being,  as  at  present,  iooraliiped,  as  an  idol. 


ESSAY  3. 

INTBREST,  RENT,  CAPITAL  AND  LABOR. 

Strictly  speaking,  Interest  is  a compensation  paid  for  the  use 
of  money.  There  is  now,  and  always  has  been,  a vague  indefi- 
nite notion,  widely  prevalent,  that  taking  Interest  is  not  in 
accordance  with  the  principles  of  justice.  On  the  other  hand,  as 
it  comports  with  the  current  theories  relating  to  profits,  in  which 
chances  are  offered  of  getting  something  for  nothing,  and,  as  it 
is  sanctioned  by  immemorial  usage,  its  advocates  ridicule  the  idea 
that  its  legitimacy  is,  in  the  least  degree,  suspected.  Its  discus- 
sion is  attended  with  immense  difficulties,  in  consequence  of  the 
current  theories  of  exchange,  of  which  it  forms  a part.  So  long 
as  these  dominate  the  commercial  world,  the  advocates  of  Inter- 
est will  have  the  advantage  in  the  discussion.  If,  in  a single 
instance,  it  can  be  shown  that  one  may  rightfully  exact  a greater 
service  for  a less — that  is,  some  for  nothing — there  is  no  resisting 
the  conclusion  that  Interest  may  be  rightfully  taken ; the  maxim, 
that  the  service  given  should  equal  that  received,  if  legitimate,  is 
universal ; if  it  is  not  of  universal  application,  it  has  no  place  in 
economic  science. 

So  deep  seated,  in  the  public  mind,  is  the  notion  that  one 
may  take  into  the  account  the  good  another  receives  from  his  ser- 
vices, and  charge  the  recipient  for  the  benefit  thus  conferred,  that 
it  is  necessary,  before  proceeding  to  the  discussion  of  the  problem 
of  Interest,  to  illustrate  the  incorrectness  of  this  doctrine.  If  this 
can  be  successfully  done,  the  question  of  Interest  will  be  much 
simplified. 

If  the  effect  upon  the  recipient  of  a commodity  or  a service, 
in  anywise  modifies  the  claim  of  him  who  furnished  it,  the  latter 
might  become  debtor,  instead  of  creditor,  by  the  operation.  If 
the  seller  of  an  axe  is  to  charge  the  buyer  for  the  prospective  ben- 


CAUSliS  OF  Tlia  CONFLICT  BETWEEN  CAPITAL  AND  LABOIl.  ol) 

efit  conferred,  logically  the  former  would  be  responsible  to  the 
latter  for  any  prospective  injury  resulting  from  the  transaction;  if 
the  latter  should  cut  his  foot,  the  former  would  be  responsible 
for  damages.  Absurd  as  is  this  conclusion,  it  is  no  more  so  than 
is  the  notion,  that  the  recipient  of  a service  is  responsible  for  the 
benefit  received.  One  has  his  leg  so  crushed  and  mangled  that 
amputation  is  necessary  to  save  his  life;  the  surgeon  is  called  and 
performs  the  operation  : What  is  the  basis  of  his  fee?  Is  he  to 
charge  for  the  benefit  conferred?  The  result  of  his  services  is  a 
life  saved.  May  he  take  that?  If  not,  the  basis  of  his  fee  is  not 
the  benefit  conferred.  For  what,  then,  is  he  entitled  to  compen- 
sation? Merely  for  service  rendered.  No  one  would  contradict 
this  conclusion.  But,  if  service  given  is  the  sole  basis  of  compen- 
sation, in  this  instance,  such  must  be  the  case  universally.  Such 
extreme  eases  are  not  generally  supposed  to  be  fair  illustrations. 
Why  are  they  not?  If  benefit  conferred,  instead  of  service  given,  is 
the  basis  of  compensation,  the  amount  of  fee  can  be  limited,  only 
by  the  benefit  conferred.  By  ancient  custom,  the  surgeon  would 
be  justified  in  making  his  patient  a slave.  Modern  custom  would 
forbid  this,  but  it  would  permit  the  surgeon  to  extort  a fee  wrung 
from  the  patient's  necessities,  instead  of  limiting  his  demand  to 
mere  compensation  for  service  given.  The  humane  impulses  of 
the  present  age  frecpiently,  if  not  generally,  restrain  men  from 
doing  what  the  current  tlieories  permit;  though  extortion  enters 
largely  into  all  deiiartments  of  exchange,  thus  enriching  one  party 
at  the  expense  of  another  There  is  no  escaping  such  result  with- 
out first  abandoning  the  theory  from  which  it  fiows.  Rigidly 
adhered  to,  the  maxim,  “ Service  given,  not  benefit  received,  is  the 
sole  basis  compensation,”  would  eliminate  the  element  of  extor- 
tion from  ail  ca)mmercial  transactions,  and  insure  justice  to  all  by 
distributing  th.^  [iroducts  of  industry  in  accordance  with  the  prin- 
ciples of  strict  e(iuity.  Any  deviation  from  this  maxim,  degrades 
excliangt*  to  the  level  of  gambling,  and  divides  the  world  of  indus- 
try into  the  two  classes  of  winners  and  losers,  thus  enabling  the 
former  to  acc.umulate  wealth  without  merit,  while  the  latter  are 
reduced  to  [)overty,  it  may  be,  without  fault.  If  such  conditions 
are  in  consonance  with  the  principles  of  justice,  as  interpreted  by 
the  people,  they  will  never  rid  themselves  of  the  practice  of  seek- 
ing to  accumulate  wealth  by  taking  Interest.  Those  who  fully 
comprehend  the  fact  that  a service  is  the  indispensable  condition 


40  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


precedent  to  every  just  claim  for  compensation,  are  justified  in 
challenging  the  practice  of  taking  Interest,  From  this  stand- 
point the  argument  will  proceed  in  this  Essay. 

A farmer  has  in  his  cellar  20  bushels  of  potatoes,  saved  for 
home-consumption;  his  neighbor  borrows  5 bushels,  to  betaken 
and  returned  at  his  sole  expense  and  trouble.  Is  there  any  basis 
to  support  a claim  on  the  part  of  the  farmer  for  compensation? 
If  the  potatoes  are  returned  without  loss  to  him,  is  he  not  in 
precisely  the  same  condition  that  he  would  have  been,  had  he  not 
loaned  to  lus  neighbor?  If  he  exacts,  in  return,  a bushel  more, 
than  was  taken,  is  not  lus  wealth  increased  without  increase  of 
service?  Is  it  not  to  him  preciselj'^  as  if  some  one  had  donated 
one  bushel  of  potatoes?  It  must  not  be  forgotten  that  the  benefit 
received  by  the  neighbor,  has  nothing  to  do  with  the  claim  for 
compensation;  this  must  have,  for  its  support,  a service  given  by 
the  farmer.  A service  necessarily  implies  an  effort  as  its  indis- 
pensable accompaniment.  If  the  farmer  expends  no  effort,  he 
renders  no  service;  he  is,  therefore,  entitled  to  no  compensation. 
Under  such  circumstances,  taking,  from  his  neighbor,  the  bushel 
of  potatoes,  would  be  extortion,  as  it  would  be  wringing,  from  the 
necessities  of  another,  something  for  nothing.  If  this  is  precisely 
analogous  to  taking  Interest,  tlie  two  must  stand  or  fall  together; 
money  has  no  inherent  power  differing  from  that  possessed  by 
any  other  species  of  property. 

If  two  men  take  a job  requiring  the  use  of  a certain  machine, 
that  can  be  obtained  by  five  hundred  days’  labor,  both  might  per- 
form the  work  required  ; the  machine  would,  then,  of  course,  be 
their  joint  property.  Or  one  might  earn  the  machine  while  the 
other  is  earning  monc}’-;  the  machine  would,  then,  belong  to  him 
who  earned  it.  It  requires  one  year,  each  working  300  days,  to 
complete  the  job,  for  which  they  receive  $1,200.  Whether  the 
machine  is  joint  or  individual  property,  it  is  deteriorated  in  value 
for  the  common  benefit;  the  loss  to  the  parties  should,  therefore, 
be  equal.  The  two,  in  300  days,  earn  $1,200 — equals  $G00  apiece; 
this  is  two  dollars  a day,  the  same  as  that  allowed  in  earning  the 
machine.  If  one  party  earns  the  machine  valued  at  $1,000  while 
the  other — presumed  to  be  an  equally  efficient  laborer — is  earning 
money,  the  wages  of  the  latter  amount  to  $1,000;  equal  wages  are 
due  for  equal  services.  Ignoring  the  fact  that  the  machine  is  dete- 


CAUSES  OP  THE  CONFLICT  BETWEEN  (CAPITAL  AND  LABOR.  41 


riorated  in  value  by  a year’s  use,  the  record  would  .stand;  In  all, 
each  has  worked  800  days;  the  owner  of  the  machine,  500  in 
earning  that,  and  300  in  doing  the  job;  the  other,  500  in  earning 
money,  while  the  former  is  earning  the  machine,  and  300  in  doing 
the  job;  the  first  has,  for  his  800  days’  labor,  his  machine  valued 
at  $1,000,  and  $600  earned,  in  doinj;  the  job — total  $1,600;  the 
latter  has  $1,000  earned  while  the  former  was  earning  the  machine, 
and  $600  for  doing  the  job — total  $1,600.  If  the  machine  were 
not  deteriorated  by  use,  this  would  be  equal  justice;  the  parties 
receive  equal  compensation  for  equal  service.  Under  such  cir- 
cumstances no  compensation  would  be  due  for  the  use  of  the 
machine. 

But  universal  experience  teaches  that  machines  are  consumed 
by  use;  hence  this  is  an  important  element  in  the  problem.  A 
machine  worth  $1,000  at  the  beginning  of  the  year,  must  be  worth 
less  at  the  close.  In  the  case  under  consideration,  the  diminu- 
tion in  value  being  for  a common  benefit,  should  be  equally 
borne  by  the  parties  benefitted.  If  the  machine  is  worth  $200 
less  in  consequence  of  the  use  and  this  diminution  were  ignored 
by  the  parties,  the  record  would  stand : At  the  end  of  800  days’ 
labor,  the  owner  of  the  machine  would  have  that  left,  equal  to 
$800,  and  $600  for  doing  the  job — total  $1,400.  The  other  would 
have  $1,000,  earned  before  commencing  the  job,  and  $600  for  doing 
the  same — total  $1,600.  For  800  days’  labor  the  former  has 
$1,400;  for  the  same,  the  latter,  entitled  to  no  more,  has  $1,600. 
This  inequality  results  from  the  deterioration  of  the  value  of  the 
machine  for  the  common  benefit  of  both  parties.  The  injustice 
of  this  is  seen  at  a glance ; two  equally  efficient  laborers  each 
work  800  days,  one  getting  $200  more  than  the  other.  Justice 
demands  that  the  recipient  of  the  $1,600  should  give  $100  to  the 
owner  of  the  machine.  The  record  would  then  stand;  Owner 
of  machine  has  $1,400  plus  $100,  equals  $1,500;  the  other,  $1,600 
minus  $100,  equah  $1,500.  Each  party  gets  $1,500  for  800  days’ 
labor,  or  $1.87i  a day. 

If  the  owner  of  the  machine  should  set  up  a claim  for  Interest, 
in  addition  to  the  compensation  for  deterioration  of  his  property, 
the  record  would  stand;  Owner  of  machine  for  800  day’s  labor, 
has  $1,500  plus  $30  Interest — total  $1,530;  the  other,  $1,500 — $30 
Interest  paid— total  received  for  800  days’  $1,470,  This  gives  the 


42 


CAUSED  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  L ABOtl. 


former  $60  more  than  the  latter,  thongli  both  have  worked  the 
same  number  of  days  of  rhe  same  degree  of  efficiency.  However 
much  it  may  be  at  variance  v ith  current  theories,  the  assertion  is 
here  made,  without  fear  of  successful  contradiction,  that  the  man 
does  not  live  who  is  able,  by  argument,  to  justify  any  claim  for 
interest  due  the  owner  of  the  machine. 

Attempts  are  commonly  made  to  justify  taking  Interest,  as 
above  specified,  on  the  grounds  that  those  from  whom  it  is  exacted 
may  preserve  the  e(j[uilibrium  by  loaning  iAeir  money.  This  ''uU 
not  do;  this  Is  begging  the  question;  the  right  to  take  Interest  is 
the  very  point  under  discussion.  A wrong  practice  cannot  be 
justitied  by  permitting  another  wrong  to  neutralize  its  evil  effects. 
Interest  is  the  party  on  trial ; it  must  not  be  made  referee  in  its 
own  case. 

If  the  laborers  referred  to  in  the  preceding  paragraph,  borrow 
$1,000,  with  which  to  purchase  the  machine,  could  the  one 
loaning  it  justify  a claim  for  compensation  for  its  use  ? Showing 
that  such  has  been  the  practice  in  all  ages,  falls  far  short  of  justi- 
fication; the  antiquity  of  the  custom  is  itself  a suspicious  circum- 
stance. Laying  aside  the  prejudice  born  of  ancient  customs,  let 
the  theory  of  Interest  be  tested  by  an  appeal  to  facts,  open  to 
inspection  by  all.  Assuming,  as  before,  that  the  $1,000  is  the 
compensation  received  for  500  days’  labor,  and  that  its  previous 
possessor  continues  working  while  the  borrowers  are  using  it  in 
doing  the  job,  each  of  the  three,  then,  assumed  to  be  laborers  of 
equal  efficiency,  while  the  money  is  employed  in  the  business, 
works  300  days.  Wages  being  $2  a day  each  should  receive  $600. 
But  the  machine  is  reduced  in  value  $200,  and  the  owners  must 
pay  $60  for  the  money  with  which  it  was  purchased.  The  record 
then  stands:  The  one  from  whom  the  money  is  borrowed  receives 
during  the  year  $600  for  labor,  and  $60  for  the  use  of  his  money 
— total  $660.  The  other  two  have  the  machine,  reduced  in  value 
to  $800,  and  $1,200  received  fordoing  the  job — total  $2,000,  out 
of  which  they  must  pay  $1,000,  money  borrowed,  and  $60  for  use 
of  the  same,  leaving  a balance  of  $940  to  be  divided  between 
them ; this  leaves  to  each,  $470.  Eiich  of  the  three  should  have 
received  for  his  services  $600;  one  receives  $60  more;  each  of 
the  other  two,  $130  less.  This  discloses  another  source  of  loss 
to  the  two  who  do  the  job;  they  received  but  $1,200  for  their 
work  and  the  deterioration  of  their  machine;  they  were  entitled 


CAUSES  OP  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR.  4:,’ 


to  this  for  their  work  alone.  They  should  have  received  $200 — 
equals  $100  each — more  for  doing  the  job.  [This  will  more  fully 
appear  in  the  discussion  of  the  relation  of  Capital  and  Labor]. 
This  leaves  only  a loss  sustained  in  paying  Interest.  The  one 
from  whom  the  money  is  borrowed  receives  $660;  each  of  the 
others,  if  paid  for  the  deterioration  of  their  machine,  by  those  for 
whose  benefit  it  was  partially  consumed,  would  receive  $o70, 
equals  $90  less  than  that  received  by  the  Interest-taker,  whose 
services  entitle  him  to  no  greater  compensation  than  either  of  the 
others.  If  each  of  the  two,  not  expecting  to  have  use  for  it,  at  the 
time  of  borrowing  the  $1,000,  had  put  out  $500  at  the  same  rate, 
he  might  have  secured  himself  against  loss  by  transferring  the 
burden  to  some  other  person ; otherwise  his  loss  is  irretrievable. 
That  which  compels  one  to  inflict  a loss  upon  others  to  avoid  sus- 
taining loss  himself,  is  absolutely  indefensible.  It  is,  perhaps, 
time  to  restate  the  maxim,  that  service  given — not  benefit  received 
— is  the  sole  equitable  basis  to  support  a claim  for  compensation. 
No  sugar-coating  of  Revelation  can  save  the  current  theories  of 
Interest.  If  service  were  not  the  basis  of  compensation,  the  phys- 
ician’s fee  would  depend  upon  saving  the  life  of  his  patient. 

Failing  to  justify  the  theory  of  Interest,  by  appealing  to  eco- 
nomic principles — so  strong  is  the  influence  of  custom — writers 
frequently  assert  that  abstinence  is  a sufficient  basis  to  support 
the  claim.  It  is  said  that  one  should  receive  compensation  for 
denying  himself  the  pleasure  of  using  his  money  for  the  gratifi- 
cation of  his  present  desires!  On  this  theory,  the  compensation 
is  not  due  for  service  .given;  it  is  dina  iov  siiffering  endured ! 
Abstinence,  so  far  as  it  suppresses  desires  the  gratification  of 
which  would  be  injurious,  is  a virtue,  worthy  of  the  highest 
respect;  but  it  can  no  more  raise  a cla'm  for  pecuniary  compensa- 
tion than  can  one’s  religious  belief.  Abstinence  is  as  far  from 
being  a commercial  commodity  as  is  truth  or  honesty.  Even 
admitting  that  those  having  money  to  loan,  are  more  abstinent 
than  the  borrowers,  this  would  afford  no  foundation  to  support  a 
claim  for  pecuniary  compensation.  Abstinence  has  its  reward 
in  the  superior  moral  and  physical  welfare  of  those  who  practice 
it;  a reward  infinitely  greater  than  any  mere  commercial  consid- 
eration. As  a matter  of  tact,  it  is  extremely  doubtful  whether  or 
not  the  most  abstinent,  are  those  having  money  to  loan. 

It  is  said  that  money  is  accumulated  by  saving.  This  is  a very 


44  CAUSES  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


pernicious  halt-truth ; tlie  getting  must  ot  necessity  precede  the  sav- 
ing. The  former  is  of  more  importance  than  the  latter:  one  may  get 
without  saving;  hut  vain  would  be  any  attempt  to  save  without 
getting.  It  is  an  absurd  assumption  that  saving  is  more  com- 
mendable than  getting,  provided  the  latter  is  effected  through 
legitimate  industrial  enterprises. 

In  consequence  of  the  malad  justment  of  the  mechanism  through 
which  the  distribution  of  wealth  is  effected,  it  is  impossible  for 
the  greatest  part  of  the  wealth  producers  to  save,  as  the  compen- 
sation received  for  their  services,  is  not  sufficient  to  defray  neces- 
sary current  expenses;  they  have,  therefore,  no  surplus,  and  con- 
sequently nothing  to  save.  If  a laborer  whose  family  consists  of 
live  persons  receives  $1.50  per  day,  for  three  hundred  days  of 
service  given  during  the  year,  he  would  receive  $450 ; this  is  an 
annual  income  of  $90,  for  each  member  of  the  family.  Where  is 
the  surplus  to  be  saved  out  of  this  miserable  pittance  ? It  may 
be  confidently  asserted  that  any  saving,  under  such  circumsances, 
must  be  at  the  expense  of  the  welfare  of  the  family ; instead, 
therefore,  of  being  commendable,  such  mock  economy  is  repre- 
hensible. The  income  above  referred  to,  is,  perhaps,  greater  than 
that  received  by  millions  of  those  who,  even  in  this  country,  toil 
early  and  late ; and  yet  they  are  taunted  with  being  spendthrifts, 
because  they  expend  their  income  in  supplying  necessaries  for 
their  families,  and  trust  in  God  for  other  days  and  equal  or  bet- 
ter opportunities  in  the  future!  “Take  no  thought  of  to-mor- 
row,” is  a precept  founded  on  high  authority  no  less  than  the 
deepest  philosophy.  There  is  no  dereliction  of  duty  on  the  part 
of  those  whose  faith  in  the  future  permits  them  to  properly  attend 
to  the  affairs  of  the  present.  Abstinence  is  a virtue,  only  when 
it  restrains  the  desires  from  perversion ; it  is  a vice,  if  it  sacrifices 
the  interests  of  the  present  to  those  of  the  future;  each  has  its 
legitimate  demands. 

Those  that  have  saved  are  not  necessarily  more  abstinent 
than  those  that  have  not.  That  one  whose  salary  is  $1,000  has 
saved  $500,  is  far  from  proving  him  more  abstinent  than  him 
whose  salary  is  $450,  and  who  has  saved  nothing.  Neither  does 
the  fact  that  the  former  has  spent  $50  more  than  the  latter  prove 
that  he  that  has  spent  the  least  is  the  most  abstinent;  had  the 
income  of  the  latter  been  greater,  he  might  have  spent  more.  If 


CAUSES  Ob'  THK  CONFI.ICT  BETWEEN  CAPITAL  AND  LABOR.  4.') 


oue  whose  iiicolue  is  $10,000  saves  $5,000,  and  another  whose  income 
is  $500,  spends  it  all,  is  the  former  necessarily  the  most  abstinent? 
Of  course,  no  one  can  answer,  either  affirmatively  or  negatively; 
the  necessary  facts  are  not  elicited.  It  is  not  proven  that  the 
loaners  are  more  abstinent  than  the  borrowers  of  money;  the 
reverse  is  probably  nearer  the  truth.  It  matters  not,  so  far  as 
Interest  is  concerned;  abstinence  is  not  a proper  basis  to  support  a 
claim  for  a pecuniary  compensation.  If  at  all  then,  Interest  must 
be  justified  as  a compensation  for  service  given.  The  illustrations 
already  given  are  believed  sufficient  proof  to  show  that  merely 
pernutting  another  to  use  one’s  money,  is  not  a service  given  for 
which  the  loaner  of  the  money  is  entitled  to  compensation.  The 
taking  of  Interest  is  in  violation  of  the  fundamental  principles  of 
equity  in  exchange.  There  is,  indeed,  a benefit  received  by  the 
borrower,  but  no  service  given  by  the  lender;  hence,  no  compen- 
sation is  due  the  latter.  Interest,  therefore,  being  destructive  of 
the  equilibrium  w’hich  should  subsist  between  the  services  given 
and  those  received,  is  inconsistent  with  the  equities  of  enchange. 

The  notion  is  almost  universal  that  no  one  would  lend  his 
moiiC}'  without  com[>ensation  for  its  use.  If  this  were  true,  it 
Would  not  justify  the  practice  of  taking  Interest.  But  is  it  true? 
This  is  somewhat  analogous  to  the  notion  that  people  would  not 
trade  except  in  anticipation  of  profits.  That  profits  are  the  induce- 
ments to  exchange,  is  true.  It  has,  however,  been  shown,  in  the 
preceding  P>say,  that  profits  are  of  two  kinds:  there  may  be  an 
increase  of  values  or  the  same  of  utilities;  the  former  are  spuri- 
OfC«,  the  latter,  legitimate.  In  this,  the  gain  is  mutual;  in  that, 
the  gain  by  one  necessitates  a loss  to  the  other.  Increase  of 
wealth,  effected  through  taking  Interest,  is,  in  principle,  like 
that  resulting  from  spurious  profits.  The  gain  derived  from  lend- 
ing money  without  Interest,  like  that  derived  from  increased 
utilities  in  exchange,  is  mutual.  If  the  borrower  invests  the 
money,  in  a machine  which  increases  the  efficacy  of  his  labor,  less 
service  will  be  required  in  producing  commodities ; as  these  require 
less  labor,  they  will  possess  less  value;  hence  less  service  of  others 
will  be  due  in  exchange  for  them. 

A community  having  easy  access  to  forests  affording  an  abun- 
dance of  lumber,  and  having  sufficient  water-power  for  its 
manufacture,  but  far  removed  from  saw-mills,  would,  if  wdse, 


46  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOE. 

furjisli  the  requisite  means  for  erecting  a mill  at  home.  The 
primitive  method  of  hand-manufacture,  which  they  must  employ, 
in  the  absence  of  mills,  would  require  an  enormous  outlay  of  labor 
in  the  manufacture  of  lumber.  In  ultimate  analysis,  as  has  been 
illustrated  in  the  Essay  treating  of  the  laws  of  exchange,  the  legit- 
imate cost  of  all  commodities  depends,  wholly,  upon  the  labor 
expt  nded  in  their  production.  The  amount  of  labor  necessary 
for  the  manufacture  of  lumber  by  machinery,  is  very  small,  com- 
pared with  that  required  for  manufacturing  it  by  hand.  Here, 
then,  is  an  inducement  for  the  members  of  that  community  to  lend 
their  money  to  any  responsible  party  who  would  employ  it  in 
erecting  a mill — an  inducement  very  much  stronger  than  is  ever 
offered  by  the  most  excessive  rate  of  Interest.  If  the  sum  of  $o,00f) 
is  loaned  for  the  erection  of  the  mill,  the  returns  for  Interest 
would  be  $300.  The  cost  of  manufacturing  lumber  by  hand  is 
not  known,  but  there  is  no  doubt  that  it  would  be,  at  least, 
twenty  times  as  great  as  that  of  manufacturing  by  macliinery.  If 
the  cost  by  the  latter  is  $2.50  per  thousand,  by  the  former  it  would 
not  be  less  than  $50 — a difference  of  $47.50,  in  favor  of  the  former. 
If  the  community  require  100,000  feet  of  lumber,  the  saving  to 
them,  in  the  cost  of  manufacturing,  would  be  $4,750.  This  shows 
an  inducement  to  loan  money,  nearly  sixteen  times  as  great  as  that 
olfered  in  the  theory  of  Interest.  This  reasoning  is  based  upon 
the  assumption  that  the  owner  of  the  mill  is  entitled  to  remuner- 
ation for  the  deterioration  of  his  property,  and  for  service  given 
in  manufacturing  the  lumber.  If  the  former  amounts  to  $500, 
and  the  latter,  including  ha-ed  help,  amounts  to  $1,500,  he  is 
entitled  to  $2,000 — all  for  services  given:  the  $500  for  previous 
services,  ending  with  the  completion  of  the  mill;  the  1,500,  for 
services  ending  with  the  manufacture.  It  is  well  to  remark,  tliat 
the  compensation  is  due,  not  for  what  the  mill  does,  but  for  what 
the  owner  does.  The  inventor  of  a machine  is  entitled  to  com- 
pensation for  service  given  in  determining  the  principles  upon 
which  it  is  constructed;  tlie  manufacturer  of  the  same  is  entitled 
to  compensation  for  service  given  in  its  construction;  the  owner 
is  entitled  to  compensation  for  any  deterioration  resulting  from 
its  use;  the  user  is  entitled  to  compensation  for  directing  its  oper- 
ation. If  either  exacts  more,  he  violates  the  fundamental  maxim 
of  exchange,  that  the  service  given  should  equal  that  received. 
This  must  be  borne  in  mind,  in  order  that  it  may  be  clearly  seen 


CAUSES  OF  THE  (’ONFLICT  BETWEEN  CAPITAT.  AND  LABOR.  47 


that  obtaining  comniodities  with  a much  less  outlay  of  labor,  is  a 
much  stronger  inducement  to  loan  money  than  is  the  most  exor- 
bitant rate  of  Interest  anticipated  for  its  use.  Therefore,  Interest 
is  not  necessary  as  an  inducement  to  loan  money.  As  previously 
shown,  taking  Interest  destroys  the  equilibrium  that  should  sub- 
sist between  the  services  given  and  those  received.  It  has  also 
been  shown  that  abstinence  is  no  ground  for  a pecuniary  compen- 
sation. Hence  taking  Interest,  or  compensation  for  the  mere  use 
of  money  is  in  violation  of  economic  law;  and  the  plea  of  neces- 
sity set  up  in  defense  of  the  practice  hiving  failed,  the  violation 
is  without  excuse. 

Rent.  Rent  is  said  to  be  a compensation  for  the  ^ose  of  land. 
If  the  compensation  is  for  service  given  in  imnroving  the  land,  it 
is  legitimate;  but,  if  it  is  claimed  for  the  mere  use  of  the  land, 
it.  is  in  violation  of  the  economic  principle,  that  service  given  is 
tlie  sole  basis  of  all  legitimate  claims  for  compensation.  In  dis- 
cussing this  subject,  it  is  necessary  to  bear  in  mind  these  two  uses 
.of  the  term  Rent. 

In  discussing  the  theory  of  Rent,  as  a compensation  paid  for 
the  use  of  land,  writers  illustrate  its  origin  as  follows:  In  all 
countries,  are  lands  of  various  degrees  of  fertility : Some  is  very 
fertile;  some,  moderately  so;  some,  sligiitlyso;  and  some,  compar- 
atively sterile.  If  the  most  fertile  lands  are  capable  of  producing 
40  bushels  of  wheat  per  acre,  and  are  all  appropriated,  while  the 
second  grade  is  capable  of  producing  only  30  bushels,  the  Rent 
of  the  best  lands  would  be  10  bushels  per  acre.  If  the  first  and 
second  grades  were  all  appropriated  and  capable  of  producing 
as  above  specified,  while  the  third  is  capable  of  producing  30 
bushels,  the  Rent  of  the  first  would  be  20  bushels,  and  that  of  the 
second  would  be  10  bushels.  If  the  first,  second  and  third  grades 
■wmre  all  appropriated  and  the  fourth  is  capable  of  producing  10 
bushels,  the  Rent  of  the  first  would  be  30  bushels;  that  of  the 
second,  30  bushels;  that  of  the  third,  10  bushels. 

The  key  to  the  above  theory  is  found  in  a statement  made  by 
an  eminent  English  economist,  John  Stuart  Mill.  He  remarks  as 
follows:  ‘‘Landed  proprietors  are  the  only  class,  of  any  numbers 
or  importance,  Avho  have  a claim  to  a share  in  the  distribution  of 
the  produce,  through  their  ownership  of  something  which  neither 
they  nor  any  one  else  have  produced.”  This  at  once  condemns  the 


48  CAUSES  OK  THE  CONFLICT  BETWEEN  CAFITAL  AND  LABOH. 


theory,  unless  it  can  be  sliown  that  God  lias  created  a class  with 
rights  superior  to  those  of  their  fellows ; the  universal  condition 
precedent  to  a ciaim  for  comjiensation,  is  service  given.  It  is  an 
historical  fact  that  the  landed  proprietors  of  England  came  into 
possession  of  their  lands  through  force — a poor  foundation,  upon 
which  to  base  a claim  of  right — and  the  present  proprietors  liold 
possession  by  the  same  means. 

The  author  above  named,  in  another  part  of  his  discussion 
says;  “When  the  ‘sacredness  of  property’  is  talked  of,  itshould 
always  be  remembered  that  any  such  sacredness  does  not  belong, 
in  the  same  degree,  to  landed  property.  It  is  the  original  inherit- 
ance of  the  whole  species.  Its  appropriation  is  wholly  a questio’i 
of  general  expediency.  When  private  property  in  land  is  not 
expedient,  it  is  unjust.  The  reverse  is  the  case  with  ])roperty  in 
movables,  and  in  all  things  the  product  of  labor;  over  these,  the 
owner’s  power  both  of  use  and  of  exclusion  should  be  absolute, 
except  when  positive  evil  to  others  whould  result  from  it;  but,  in 
the  case  of  land,  no  exclusive  right  should  be  permitted  in  any 
individual  which  cannot  be  shown  to  be  productive  of  positive 
good.  To  be  allowed  any  exclusive  right  at  all,  over  a portion  of 
the  common  inheritance,  while  there  are  others  who  have  no  |X)r- 
tion,  is  already  a privilege.  No  quantity  of  movablefgoods  which 
a person  can  acquire  by  his  labor,  prevents  others  from  acquiring 
the  like  by  the  same  means;  but  from  the  very  nature  of  the  ca«te, 
whoever  owns  land  keeps  others  out  of  the  enjoyment  of  it. 
When  land  is  not  intended  to  be  cultivated,  no  good  reason  can 
in  general  be  given  for  its  being  private  proueity  at  all.  Even  in 
the  case  of  cultivated  land,  a man  whom,  though  only  one  among 
millions,  the  law  permits  to  hold  thousands  of  acres  as  his  single 
share,  is  not  entitled  to  think  that  all  this  is  given  to  him  to  use 
and  abuse,  and  deal  with  as  if  it  concerned  nobody  but  himself. 
The  rents  or  profits  which  he  can  obtain  from  it  are  at  his  sole  dis- 
posal; but  with  regard  to  the  land,  in  everything  which  he  doe-* 
with  it,  and  in  everything  which  he  abstains  from  doing,  he 
morally  bound,  and  should,  whenever  the  case  admits,  be  legally 
compelled  to  make  his  interest  and  pleasure  consistent  with  tlui 
public  good.”  Consistent  with  the  public  good!  how  can  - 
mitting  certain  individuals  to  exact  compensation,  without  righ*^, 
be  consistent  with  the  public  good? 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOU.  49 


Rout,  based  upon  the  theory  illustrated  in  a preceding  para- 
graph, w'hen  stripped  of  the  mask  wdtii  wdiicli  its  deformity  iias 
been  hidden  for  hundreds  of  years,  stands  revealed  as  an  econom- 
ical monstrosity,  which  has  filled  tlie  world  with  ignoble  pomp 
and  pinching  poverty.  According  to  Mr.  3Iill,  it  permits  the 
landed  proprietors  to  share  in  the  products,  without  contributing 
anything  to  their  production.  Is  this  -‘consistent  with  tlie  public 
good  ? ” Does  not  the  noted  Economist  say  of  land,  and  that  truly, 
“It  is  the  original  inheritance  of  the  whole  species?”  If  it 
belongs  by  inherent  right  to  the  h irnan  race,  and  not  to  a particular 
class,  upon  wdiat  principle  of  justice  can  a claim  for  compensa- 
tion for  mere  use  be  based?  Naturally,  have  not  all  an  equal 
right  to  use  the  land?  Can  this  right  of  all  be  transferred  to  a 
few^  by  a irere  appeal  to  a custom  bearing  no  credentials  of 
authority,  except  the  cobwebs  of  past  ages? 

The  working  of  the  theory  of  Rent  referred  to  above,  may  be 
illustrated  as  follows : If  a country  limited  in  area,  to  one  hundred 
square  miles,  consists  of  four  diilerent  grades  of  soil,  as  previ- 
ously specified,  having  respectively  the  productive  capacity  of  40, 
30,  20,  and  10  bushels  per  acre,  the  territory  consisting  of  an 
equal  number  of  square  miles  of  each,  and  the  lower  grades  unoc- 
cupied, every  acre  of  the  higher  grade  would  draw  Rent,  provided 
it  is  all  appropriated.  As  the  latter  grade  is  capable  of  producing 
40  bushels  per  acre,  while  the  second  grade  is  capable  of  produc- 
ing but  30,  little  more  labor  is  required  to  produce  40  bushels  on 
the  superior  than  to  produce  30  on  the  inferior  land ; hence  anyone 
desiring  the  use  of  land  in  that  country,  except  the  occupants  of 
the  best  land,  would  be  induced  to  pay  nearly  10  bushels  per  acre 
for  the  privilege  of  using  the  latter.  If  the  twenty-five  square 
miles  of  land,  the  most  productive,  is  sufficient  to  supply  the 
demand,  the  next  grade  below  will  draw  no  Rent,  because  the  use 
of  the  former  can  be  had  at  a rate  not  exceeding  the  difference  in 
the  productive  powers  of  the  two  grades.  ^As  it  is,  evidently,  a 
system  of  extortion,  the  holders  of  the  superior  land  will  demand 
all  they  can  wring  from  the  necessities  of  those  desiring  to  use 
the  land;  the  extreme  limit  is  10  bushels,  the  difference  in  the 
productive  capacity  of  the  two  grades.  Those,  in  need  of  land, 
would  have  left,  after  paying  10  bushels  for  the  use  of  the  superior 
land,  30  bushels  per  acre — precisely  the  same  that  they  would 


50  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


have,  had  they,  without  paying  Rent,  expended  their  labor  on  the 
sjcond  grade. 

If  the  first  and  second  grades  are  all  appropriated,  and  the 
first  not  sufficient  to  supply  the  demand  for  use,  both  will  draw 
Rent.  Labor  expended  on  the  third  grade  will  produce  but  20 
bushels;  on  the  second,  30;  on  the  first,  40.  After  paying  20 
bushels  for  the  use  of  the  best  land,  or  10  bushels  for  that  of  the 
second,  the  laborer  would  have  left.  20  bushels  per  acre — the 
same  as  if  he  had,  without  paying  Rent,  expended  his  labor  on 
the  third  grade.  Under  such  circumstances  the  superior  land 
which  previously  drew  10  bushels,  now  draws  20;  the  second 
grade  which  previously  drew  no  Rent,  now  draws  10  bushels;  and 
the  third  grade  draws  none.  Twenty  bushels  for  the  best  land, 
and  10  for  the  second  grade,  are  the  highest;  practically,  in  each 
case,  the  Rent  would  be  slightly  below  these  figures;  the  exact 
amount  is  determined  by  the  necessities  of  those  in  need,  and  the 
opportunities  of  those  in  possession  of  the  lands. 

If  all  the  land  in  the  first  three  grades  is  appropriated,  and 
the  demand  for  use  is  not  fully  supplied,  the  landless  are  left  to 
choose  between  paying  Rent  to  the  occupants  of  the  superior 
grades  and  accepting  free  of  rent  the  poorest  land.  As  the  pro- 
ductive capacity  of  the  superior  lands  is,  beginning  with  the 
highest,  40,  30,  and  20  bushels  per  acre,  and  that  of  the  lowest 
grade  but  10  bushels,  it  foilovvs  that  the  most  productive  land 
will  draw,  as  Rent,  30  bushels;  the  second  grade  will  draw  20; 
the  third,  10;  the  laborers  net  receipts  would  be  precisely  the 
same,  whether  he  paid  30  bushels  for  the  use  of  the  best 
land,  20,  for  the  second,  10,  for  the  third,  or  wmrked  the  fourth 
free  of  Rent. 

As  those  who  attempt  to  justify  the  above  theory  of  Rent, 
make  no  pretense  that  the  more  fertile  lands  are  made  so  by  the 
labor  of  the  occupants,  it  follows,  irresistibly,  that  the  compensa- 
tion demanded  for  their  use  is  not  based  upon  any  service  given ; 
it  is  therefore,  nothing,  more  or  less,  than  tribute  exacted  from 
those  who  have  an  inalienable  right  to  an  equal  share  in  all  the 
bounties  of  nature.  It  is  well,  again  to  remark,  that  no  man  can 
rightfully  take  pay  for  what  God  has  done;  though  practiced 
through  thousands  of  years,  it  finds  no  warrant  in  sound  eco- 
nomic philosophy.  If,  therefore.  Rent  has  no  better  foundation 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR.  51 


than  the  above,  for  its  support,  it  is  inconsistent  with  the  theory 
of  ‘‘equal  rights,”  and  one  or  the  other  must  fall.  Which  shall 
it  be  ? 

The  chance  occupancy  of  mineral  lands,  natural  facilities  for 
driving  machinery,  furnished  by  waterfalls,  and  the  possession  of 
oil  territory  are  vast  engines  of  extortion  in  the  hands  of  those 
who  control  them.  It  is  the  false  theory  of  Rent  that  permits  the 
monopolizers  of  these  bounties  of  nature  to  extort  from  their  fel- 
lows, a large  share  of  the  products  of  industry.  'All  the  income 
received,  by  those  having  these  superior  natural  opportunities, 
beyond  a fair  compensation  for  service  given,  is  in  the  nature  of 
that  species  of  Rent  already  illustrated  as  being  nothing  less  tliaii 
tribute  exacted  from  those  who,  by  chance  or  otherwise,  are  not 
in  possession  of  like  opportunities. 

Of  the  same  species  is  the  Rent  derived  from  the  possession  of 
superior  commercial  facilities;  some  of  these  facilities  are  natural; 
others  are  industrial.  The  most  important  of  the  former  are 
oceans,  bays,  lakes,  and  rivers;  the  bays  afford  protection  to 
vessels  while  loading  or  unloading  goods,  and  when  these  are 
awaiting  transportation;  the  other  three  are  the  natural  high- 
ways of  communication  between  distant  points.  The  industrial 
facilities  are  not  independent  of  the  natural,  but  they  are,  to  a 
great  extent,  of  human  creation. 

The  natural  commercial  facilities  are,  evidently,  the  inherit- 
ance of  all  mankind  : no  one,  therefore,  can  rightfully  appropriate 
them  and  extort,  from  his  fellows,  pay  for  their  use.  All  income 
derived  from  the.-e,  is  tribute  extorted  by  force  instead  of  com- 
pensation for  service  given.  Hence,  any  theory  of  Rent  which 
tolerates  such  injustice  must  be  condemned,  though  sanctioned 
by  custom  so  ancient  that  the  ‘‘memory  of  man  runneth  not  to 
the  contraiy.” 

The  industrial  commen.-ial  facilities  present  a somewhat  com- 
plex problem.  In  its  discussion,  wdll  be  met  strong  prejudice, 
the  removal  of  which  will  be  no  small  task.  By  immemorial 
usage,  those  occupying  land  in  closely  settled  districts,  have,  in 
many  instances,  accumulated  immense  wealth  through  the  instru- 
mentality of  Rent.  The  maxim,  “What  man  has  done,  man 
may  do,”  has  much  influence  in  perpetuating  a system  which 
seems  to  open  a way  to  wealth,  without  the  tedious  process  of 


53  CAUSES  OP  THE  CONFCICT  BETWEEN  CAPITAL  AND  LABOR. 


earning  it,  through  years  of  patient  industry.  The  fact  that  the 
inordinate  gains  thus  accruing  to  the  feio,  are  secured,  only 
through  the  inevitable  losses  to  the  many^  commonly  escapes 
detection.  It  is  not  generally  seen  that  this  tends  to  make  busi- 
ness a mere  lottery,  in  which  the  prize  secured  by  one,  is  condi- 
tioned upon  a loss  to  all  competitors.  An  attempt  will  now  be 
made  to  illustrate  the  nature  of  Rent  growing  out  of  industrial 
commercial  facilities. 

A,  B,  and  C are  three  farmers  in  the  prime  of  life — all 
equally  strong,  active,  industrious,  skillful,  and  intelligent.  No 
one  of  the  three  lives  within  fifty  miles  of  either  of  the  t)thers. 
Each  has  100  acres  of  land,  equally  well  improved,  as  the  result 
of  twenty  years’  industry  and  economy.  So  far  in  life,  all  have 
received  equal  compensation  for  their  services;  this  is  as  it  should 
be — equal  compensation  received  for  equal  service  given.  If  A’s 
farm  is  situated  on  the  natural  line  of  communication  between 
some  wealth-producing  region  and  a market  for  commodities 
therein  produced,  and  a railroad  is  built  between  these  points, 
the  wealth  of  A,  in  common  with  all  land-holders  along  that  line, 
will  be  increased  through  the  instrumentality  of  that  species  of 
Rent  resulting  from  superior  industrial  commercial  facilities.  At 
once,  the  equilibrium  of  the  receipts  of  A,  B,  and  C is  destroyed ; 
the  receipts  of  the  first  are  increased,  without  change  in  the 
amount  of  service  given.  If  the  location  of  A’s  farm  is  such  as  to 
make  it  desirable  as  a site  for  a depot,  he,  at  once,  becomes  a 
millionaire.  He  is  now  a man  of  commanding  presence:  his  lofty 
mien,  his  graceful  movements,  his  keen  eye,  his  classic  features, 
and  his  transcendant  genius  are  subjects  of  universal  remark. 
Those  -who  make  heredity  their  special  hobby,  trace  his  lineage,  in 
search  of  his  noble  ancestry,  and  the  welkin  rings  with  his 
praises.  He  is  now  in  possession  of  the  philosopher's  stone, 
through  which  he  holds  communion  with  the  genii  having  in 
charge  all  the  secret  springs  of  wealth  and  happiness.  In  rapid 
succession  he  mounts  the  successive  rounds  of  the  political  ladder: 
from  private  citizen,  to  supervisor;  from  supervisor,  to  state  legis- 
lator; from  state  legislator,  to  representative  in  congress.  Surely, 
it  is  thought,  he  that  has  the  power  to  spring  at  a single  bound 
from  the  condition  of  an  average  farmer  to  that  of  a millionaire, 
must  have  the  capacity  to  relieve  plodding  mortals  of  the  neces- 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


5:1 


sity  of  seeking  wealth  through  the  tedious  routine  of  industrial 
enterprises.  But  alas!  the  hopes  so  fondly  cherished  are  not  real- 
ized : the  universal  wealth  anticipated  is  not  forth-coming.  The 
palace  rises  in  stately  grandeur  in  the  midst  of  the  hovels  of  those 
whose  industry  has  contributed  to  the  erection  of  this  memento 
of  commercial  injustice. 

It  will  be  observed  that  wealth  accumulated  as  above  indi- 
cated, is  not  a consequence  of  any  superiority  of  its  posse.ssor;  he 
contributed  little  to  its  production.  What,  then,  is  its  source  ? 
The  most  superficial  observer  w^hose  attention  is  directed  to  the 
facts,  will  see  that  it  results  from  superior  commercial  facilities — 
both  natural  and  industrial.  The  former  are  the  common  inherit- 
ance of  the  Race ; in  these,  all  mankind  are  entitled  to  share.  The 
latter  are  of  human  creation;  these  belong  to  all  those  whose 
industry  has  contributed  to  their  production.  Here,  then,  are 
two  potent  factors  at  work  transferring  the  wealth  produced,  it 
may  be,  bj"^  thousands  to  a single  individual,  who  thus  becomes  a 
millionaire,  indeed ; but  his  vast  accumulations  are,  mostly,  the 
result  of  tribute  exacted  from  his  fellows.  Rent  as  thus  illus- 
trated, like  all  preceding  examples,  is  at  war  with  the  principles 
of  eternal  justice:  so  long  as  it  is  tolerated  among  men,  no  equit- 
able distribution  of  the  products  of  industry  is  possible.  There- 
fore its  elimination  as  a factor  in  the  accumulation  of  individual 
wealth,  is  absolutely  indispensable  to  the  public  weal. 

Rent  as  a compensation  for  service  given.  There  is  a species  of 
Rent  radically  different  from  that  already  illustrated:  it  is  merely 
a compensation  for  service  given. 

Preliminary  to  the  discussion  of  the  nature  of  this  species  of 
Rent,  it  is  necessary,  again,  to  remark,  that  economic  principles 
are  wholly  independent  of  political  institutions.  They  antedate 
all  legislative  enactments,  and  are  as  persistent  in  their  influence 
among  the  savages  in  the  wilds  of  Africa,  whose  wealth  consists, 
only  of  the  spontaneous  productions  of  nature,  as  among  the 
most  highly  civilized  people,  whose  industry  and  skill  in  modify- 
ing the  natural  products,  have  produced  wealth  which,  if  equit- 
ably distributed,  would  be  the  crowning  glory  of  civilization.  In 
the  discussion  of  economic  principles,  therefore,  it  is  necessary  to 
proceed  as  if  no  political  institutions  were  in  existence.  Ignor- 
ing this  fact,  political  economy  becomes  a labyrinth  into  which, 


54  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOB. 


all  who  enter  are  lost  among  its  gloomy  caverns,  in  which  are 
buried  the  hopes  of  millions  whose  fate  has  filled  the  world  with 
despair.  No  wonder  tliat  economics  is  sometimes  called  the 
“Gloomy  Science!”  Let  it  be  understood,  then,  that,  in  this 
discussion,  no  note  is  taken  of  the  influence  of  political  institu- 
tions. All  are  presumed  to  have  the  same  rights;  each  may 
improve  any  tract  of  land  not  previously  improved  by  another. 

If  anyone  has,  with  spade,  plow,  or  any . other  implement, 
cultivated  a piece  of  land,  there  at  once  arises,  as  a consequence 
of  that  culture,  a value  in  that  land,  proportional  to  the  labor 
expended  in  the  operation.  There  arises  in  that  laborer  a right  of 
dominion  over  a specific  part  of  what  was  previously  the  common 
domain;  this  right  constitutes  individual  property  in  land.  The 
civil  authority,  that  is,  the  people,  through  legislative  enactment, 
may,  as  a matter  of  temporary  expediency,  grant  him  the  exclu- 
sive privilege  of  occupying  territory  beyond  the  limits  of  his 
improvements.  But  no  such  absolute  right  of  property  attaches 
to  the  unimproved  as  to  the  improved  land.  The  same  authority 
that  granted  the  privilege  of  individual  occupancy  of  the  unim- 
proved land,  may,  if  expediency  requires  it,  revoke  [the  grant 
without  compensating  the  grantee;  he  having  given  no  service, 
the  indispensable  condition  precedent  to  a claim  for  compensa- 
tion. Not  so  with  reference  to  the  improved  land:  here  is  a valid 
claim  for  compensation  due  for  labor  expended  in  the  improve- 
ment; this  is  an  absolute  right  of  which  the  individual  cannot  be 
deprived,  even  by  the  legislature.  If  the  public  good  demands 
it,  he  that  has  improved  land,  may  be  dispossessed,  if  he  is  duly 
compensated  for  his  labor.  The  only  legitimate  basis,  therefore, 
for  the  ownership  of  land,  like  that  of  any  other  suecies  of  prop- 
erty, is  the  labor  expended  in  its  improvement. 

If,  as  stated  in  the  preceding  paragraph,  one  improves  a 
piece  of  land,  he  may  rightfully  claim  compensation  from  any  one 
using  it;  not  for  the  use  of  the  land,  but  for  give  in  its 

improvement.  Here,  as  throughout  all  the  realms  of  exchange, 
the  equilibrium  of  the  services  given  and  those  received  must  be 
preserved;  else  universal  discord  reigns  supreme.  If  by  industri- 
ously plying  the  spade,  one  has  prepared  for  the  seed,  one  acre  of 
land,  at  an  expenditure  of  three  days’  labor,  the  extent  of  his 
right  is  thereby  fixed : he  is  entitled  to  an  equivalent  service 


CAUSES  OF  TIIR  CONFLICT  BETWEEN  CAUITAI,  AND  IvABOlC  O-l 

from  him  who  plants  the  seed,  harvests  the  crop  and  approjiri- 
ates  to  his  own  use  the  proceeds.  The  same  principle  must 
govern  from  the  preparing  of  the  soil  to  the  marketing  of  the  crop  : 
he  that  plants,  cultivates,  harvests,  and  markets  the  crop  is  enti- 
tled to  compensation  for  his  services.  If  this  lirings  the  crop  to 
the  consumer,  he  discharges  all  obligation  by  giving  in  return, 
that  which  represents  services  equal  to  all  those  given  from  the 
preparing  of  the  soil  to  the  delivery  of  the  proceeds.  If,  instead 
of  being  sold  directly  to  the  consumer,  the  crop  is  sold  to  a mid- 
dle-man who  transports  it  to  the  place  of  tinal  consumption,  he  to 
whom  it  is  delivered  must,  in  addition  to  the  original  cost  to  the 
middle-man,  pay  him  for  his  services,  including  the  cost  of  trans- 
jiortation. 

The  above  repetition  of  what  is  substantially  stated  in  Essay 
second,  is  necessary  in  anticipation  of  objections  founded  on  the 
imaginary  profits  which  he  that  prepared  the  soil  might  have  real- 
ized, had  he  planted,  cultivated,  harvested,  and  marketed  the 
crop.  This  species  of  profits — in  the  Essay  already  referred  to, 
styled  spurious — is  so  fortified  by  custom,  that  it  is  difficult  to 
draw  the  attention  of  the  reader  to  its  mischievous  features. 
Hence,  blinded  by  his  prejudices,  the  superficial  observer  will  de- 
clare that  no  exchanges  would  take  place,  if  this  pernicious 
species  of  profits  were  eliminated  from  the  theories  of  trade. 
Those  who  thus  reason,  seem  not  to  see  that  the  wealth  of  the 
w'orld  is  not,  in  the  slightest  degree,  increased  through  this 
species  of  profits.  It  is,  nevertheless,  true  that  the  only  result 
effected  through  this  agency,  is  merely  a transfer  of  wealth  from 
one  to  another;  hence,  if  some  realize  a gain,  others  must  suffer  a 
loss.  If  one  receives  a commodity,  equal  in  value  to  one  dollar, 
in  exchange  for  another,  equal  in  value  to  seventy-five  cents,  there 
is  a gain  of  twenty-five  cents  realized  by  one  (party,  conditioned 
upon  an  equal  loss  suffered  by  the  other;  and  the  wealth  of  the 
world  is  neither  increased  nor  diminished  by  the  transaction. 
Such  is  the  inevitable  result  of  all  transactions  in  which  the 
species  of  profits  under  consideration  is  tolerated.  It  is  a mis- 
chievous intruder  on  the  domain  of  Commerce,  and  the  best 
interests  of  all  mankind  demand  its  expulsion, 

The  other  species  of  profits — in  the  same  Essay,  styled  legiti- 
mate— are  in  accordance  with  the  strictest  equity:  the  gains 


f)fi  causp:s  of  the  conflict  between  capital  and  labok. 


realized  through  their  agency,  by  some,  are  not  conditioned  upon 
losses  suffered  by  others;  through  their  instrumentality  all  gain. 
Through  them  the  wealth  of  tlie  world  is  vastly  increased  by 
exchange;  without  them,  universal  poverty  would  eternally  pre- 
vail. Tliey  are  justified  by  tlieir  fruits,  being  always  beneficent. 
If,  as  already  illustrated,  the  hatter  and  the  shoemaker  consult 
their  mutual  interest,  they  have  sufficient  inducements  to  exchange 
the  products  of  their  labor  on  such  terms  as  will  increase  the 
wealth  of  both.  If  the  hatter  can  make  a good  hat  in  one  day, 
and  an  indifferent  pair  of  boots  in  four  days,  while  the  reverse 
is  true  of  the  shoemaker,  he  can  make  a good  pair  of  boots  in  one 
day  and  an  indifferent  hat  in  four  days,  a very  strong  inducement 
to  an  exchange  exists,  prompted  by  a desire  to  realize  gains 
through  legitimate  profits.  Each,  by  working  at  his  own  trade 
and  exchanging  with  the  other,  can  get  a very  much  better  article 
for  one  day’s  labor  than  he  could  make  for  himself  in  four  days. 
Had  the  hatter  made  his  own  boots,  they  would  have  cost  him 
four  days’  labor.  Had  the  shoemaker  made  his  own  hat,  it  would 
have  cost  him  the  same.  By  exchanging,  therefore,  each  one  gets 
four  times  as  much  for  his  work  as  he  would  in  expending  his 
labor  directly  upon  the  object  of  his  desire.  This  is  typical  of 
the  relations  existing  among  the  skilled  laborers  throughout  the 
world : all  exchanges  based  upon  this  species  of  profits  are  in  the 
highest  degree  commendable;  their  tendency  is  to  increase  the 
wealth  of  all.  Add  to  this  the  natural  inducements  to  exchange 
offered  in  soil,  climate,  etc.,  and  the  absurdity  of  attempting  to 
jjistify  what  are  termed  “ spurious  profits,”  on  the  plea  of  neces- 
sity, is  proven  beyond  the  power  of  even  sophistry  to  raise  a 
doubt. 

In  the  following  remarks,  closing  the  discussion  of  Rent,  let 
it  be  borne  in  mind  that  it  involves  nothing,  more  or  less,  than  a 
mutual  exchange  of  services;  these  being  the  only  legitimate  basis 
to  support  a claim  for  compensation  throughout  all  the  complexi- 
ties of  a world-wide  commerce. 

If  one  has  $5,000  with  which  to  build  a house,  and  the  equa- 
tion of  values  is  preserved,  that  is,  if  in  every  instance,  the  value 
given  equals  that  received,  The  house,  when  completed,  will  be 
worth  $5,000,  plus  the  value  of  the  services  of  the  owner  in  super- 
intending the  construction.  Assuming  this  additional  sum  to  be 


CAUSES  OB’  THB^  CONB’LICT  BETWEEN'  CAPITA].  AND  LABOR, 


57 


$200,  the  entire  cost  of  the  house  is  $5,200.  The  problem  now 
is,  if  he  rents  the  house,  what  is  the  basis  to  support  a claim  for 
compensation?  Is  it  for  services  given  while  the  tenant  occupies 
the  house?  There  is  no  such  presumption ; the  owner  may  be  in 
Europe  during  the  entire  term.  Can  one  serve  without  working? 
When  one  stops  work,  do  his  services  continue?  If  one  works 
for  another  a single  day,  do  his  services  continue  beyond  tliat 
day?  If  they  do  not,  the  service  must  cease  with  the  labor. 
This  is  a mere  play  upon  words : .the  real  fact  is,  to  serve  is  to  work ; 
in  an  economic  sense,  to  serve  without  working,  is  an  absolute 
impossiblity.  In  reference  to  the  house,  the  service  of  the  owner 
ended  with  its  completion.  His  ownership  of  a house,  or  any 
other  species  of  property,  can  not  continue  his  services  after  his 
labor  ceases.  Inanimate  material  can  not  be  invested  with  power 
to  perform  human  labor;  therefore  the  owner  can  not  give  service 
through  the  instrumentality  of  his  house.  If  this  species  of  Rent 
has  no  better  foundation  for  its  support,  than  the,  imaginary  ser- 
vice rendered  by  the  ow.ncr,  through  the  use  of  the  house,  it  has 
no  valid  support  at  all,  and  must  go  down  with  all  other  claims 
for  compensation,  not  based  on  service  given  by  the  claimant. 

But  there  is  a valid  basis  to  support  a claim  for  compensation 
due  the  ow'ner  of  the  house,  from  him  who  occupies  it,  in  the 
deterioration  of  property,  the  result  of  former  labor  expended  in 
its  construction.  In  the  case  mentioned  in  the  preceding  par- 
agraph, the  owner  of  the  house  had,  before  commencing  its 
construction,  saved  $5,000  ; he  also  earned  $200,  for  labor  expended 
in  superintending ; Uierefore  $5200  is  an  exact  equivalent  for  all  his 
services.  The  relation  between  the  owner  and  him  that  occupies 
the  house,  is,  iinaucially,  precisely  the  same  as  it  vvould  be  were 
the  property  wheat  or  any  other  species  of  property,  instead  of 
a house : the  origin  of  real  estate  is  the  same  as  that  of  personal  prop- 
erty ; both  are  the  result  of  labor,  the  creator  of  all  property.  It  mat- 
ters not,  therefore,  whether  the  $5,200  expresses  the  value  of  a house 
or  that  of  a bin  of  wheat.  If  it  were  the  latter,  he  that  consumed 
$100  worth  of  the  wheat,  w'ould  incur  an  indebtedness  of  that 
amount  to  the  owner.  The  indebtedness  would  have  been  neither 
more  nor  less,  had  there  been  a consumption  of  $100,  resulting 
from  the  use  of  a house.  In  either  case,  the  claim  for  compensa- 
tion is  not  based  upon  the  use  of  the  property;  it  has,  for  its 
suppoi;t,  the  services  previously  given  by  the  owner  in  earning 


58  CAUSES  OK  THE  CONFLICT  HETWEEN  CAPITAL  AND  LABOR. 


the  wheat  or  the  house.  Therefore,  rigidly  adlieriug  to  the  fun- 
damental principles  of  Value,  as  illustrated  in  the  First  Essay,  the 
conclusion  is  irresistible  that  Rent  is  justified,  only  so  far  as  it  is 
a compensation  for  service  given,  not  in  the  use  of  the  property, 
but  in  labor  previously  expended  in  its  production. 

It  is  freely  admitted  that  the  conclusion  above  reached,  has 
little  precedent  for  its  support,  but  it  is  confidently  affirmed 
that  it  is  justified  by  the  reawning  of  all  economists:  all  have,  over 
and  over  again,  established  the  fact  that,  without  exception,  the 
indispensable  condition  precedent  to  a claim  for  compensation,  is 
services  given  by  the  claimant. 

It  will  l)e  asked,  “ Ought  not  he  that  occupies  the  house,  pay 
the  taxes  and  insuranc^e?”  Certainly  not:  these  are  not  services 
given  by  the  owner;  they  are  burdens  resting  upon  him,  whether 
his  property  be  real  or  personal.  To  throw  them  upon  the  one 
renting  property,  is  to  throw  the  burden  of  taxation  from  those 
having  property  to  those  having  none,  and  compelling  the  latter 
to  take  risks  not  their  own.  If  the  latter  are  ovvners  of  property, 
they,  of  course,  should  pay  the  taxes  and  insurance  on  tliat\ 
whether  they  have  property  or  not,  tiiey  should  bear  their  proper 
share  of  taxation  through  the  payment  of  a poll-tax  or  otherwise. 
But  vain  are  all  attempts  to  justify  throwing  the  burdens  of 
taxation  and  insurance  upon  those  least  able  to  bear  them. 

Here  wdll  be  met  the  objection  that  no  houses  would  be  built 
to  rent  under  such  circumstances.  At  first  si^ht,  this  sOems  to 
present  a somewhat  formidable  obstacle.  This  objection  might  be 
dismissed  by  remarking  that  there  is  no  insurmonntable  obstacles 
in  the  line  of  duty;  the  right  is  'dXw  ay  % practicable.  But  it  can  be 
shown  here,  as  well  as  in  all  other  departments  of  production  and 
exchange,  that  sufiicient  inducements  are  offered  to  build  houses  to 
rent,  inspired  by  no  other  motive  than  to  receive  a fair  remunera- 
tion for  labor  expended.  The  building  of  houses,  legitimately 
belongs,  exclusively,  to  one  department  of  industry,  the  laborers 
in  which  are  practical  builders.  Were  there  no  houses  to  be 
rented,  the  builders  would  have  sufficient  inducement  to  build  for 
that  purpose,  as  thus  they  could  find  employment  for  their  industry 
and  skill  and  obtain  compensation  for  services  rendered  in  construc- 
tion. If  there  were  no  houses  or  other  buildings  to  be  constructed, 
they  must  change  their  occupation  or  be  without  employment. 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR.  59 


In  Other  departments  of  labor,  their  services  might  not  be  required ; 
and,  if  they  were,  their  skill  as  builders  would  be,  practically, 
almost  worthless.  Hence  the  inducement  offered  them  to  build 
houses  is  very  strong.  After  they  are  built,  circumstances  will 
determine  whether  houses  are  to  be  rented  or  sold.  If  the  builder 
needs  the  money  for  present  use,  he  prefers  to  sell  rather  than 
rent  the  house.  If  he  has  no  present  use  for  the  money,  it  is  im- 
material whether  his  property  is  in  a house  or  in  money : he  is  the 
possessor  of  the  same  amount  of  wealth  in  either  case.  In  con- 
structing such  buildings  as  are  in  demand  for  use,  he  finds  employ- 
ment for  his  labor  in  that  field  in  which  it  is  most  efficient;  in 
other  fields,  his  services  might  not  be  required,  or  if  they  were  in 
demand,  they  would  be  much  less  productive.  In  this  depart- 
ment, as  well  as  in  every  other,  the  products  of  industry  tend 
rapidly  to  decay ; hence  the  builders  would  be  amply  compensated  by 
receiving  as  Rent  for  their  property  a sum  sufficient  to  keep  it  in 
repair.  There  need  be  no  fears  that  building  would  cease  in  con- 
sequence of  eliminating  the  speculative  element  from  the  theory 
of  Rent:  In  the  discussion  of  the  relations  of  Capital  and  Labor, 
it  will  be  seen  that  the  toiling  millions  do  not  get  compensation 
even  for  their  services ; yet  every  ten  years  they  'produce  wealth 
equal  in  amount  to  all  that  has  been  saved  since  time  began. 

Capital  and,  Labor.  Before  proceeding  with  the  discussion 
of  this  subject,  it  is  necessary  to  define  the  terms:  in  these  defi- 
nitions, there  is  great  diversity  among  authors;  the  definitions 
are  nearly  as  numerous  as  the  writers. 

In  this  discussion,  Capital  is  assumed  to  be  merely  the  pro- 
ducts of  past  Labor,  used  as  instruments  of  present  production : 
any  product  of  labor  used  as  an  instrument  of  further  production, 
is  Capital;  those  not  so  used,  are  not  Capital.  Tools  and 
machinery  of  all  kinds,  all  merchandise  except  that  in  the  hands 
of  the  consumer,  farm  products,  when  reserved  for  further  produc- 
tion, and  ail  the  infinite  variety  of  things  so  used  is  Capital.  The 
spade  with  which  the  gardener  works,  is  as  truly  Capital  as  is  the 
steam-engine  which  drives  all  the  machinery  of  the  most  exten- 
sive factory : both  are  products  of  past  Labor,  used  as  instruments 
■of  further  production.  The  line  of  demarkation  between  that 
species  of  property  which  is  Capital,  and  that  which  is  not,  is 
thus  clearly  drawn  and  easily  discerned. 


fiO  CAUSES  OF  THE  CONFLICT  I5ET\V  KEN  CAPITAL  AND  LAHOR. 


Labor  is  human  elforts  prompted  Ixy  a desire  for  a future 
good.  It  maj  be  mental  or  mental  and  physical  : there  is  no 
Ij'Ahov  pur  elij  physical;  it  is  doubtful  whether  any  Labor  is  purely 
mental.  In  the  simplest  kind  of  Labor,  the  mind  directs  the 
movements;  no  matter  whether  the  effort  is  directed  to  the  pro- 
duction of  a steam-engine  or  an  ax  helve.  An  important  distinc- 
tion is  that  expressed  in  the  terms  unskilled  and  skilled  Labor: 
the  efficiency  of  the  former  is  slight;  that  of  the  latter  is  great. 
In  the  same  department  of  Labor,  there  is  no  difficulty  in  deter- 
mining the  relative  degrees  of  skill  possessed  by  the  Laborers  and 
hence,  the  relative  compensation  due  for  their  services.  But 
among  the  various  departments,  this  is  a troublesome  element. 
Which  requires  the  greater  skill,  to  make  a coat,  or  to  make  a 
hat?  to  make  boots,  or  do  efficient  work  on  a farm  ? to  make  a 
watch,  or  to  heal  the  sick  ? to  make  goods,  or  to  excliangc  them  ? 
It  is  probable,  though  not  absolutely  certain,  that  the  same 
degree  of  skill  is  re(juired  in  all  departmenU  of  Labor.  If  so,  the 
same  wages  should  be  paid  to  the  most  efficient  Laborers  in  all 
departments;  all  of  ecjual  efficiency  in  their  respective  depart- 
ments, should  receive  equal  compensation  for  their  services. 

It  was  stated  in  the  preceding  paragraph,  that  there  is 
doubt  in  regard  to  any  Labor’s  being  purely'  mental.  That  there 
is  a doubt,  can  be  shown  as  follows:  Belonging  to  that  class 
whose  Labor  is  supposed  to  be  purely  mental,  are  government 
officials,  lawyers,  authors,  teachers,  and  many  others  whose  Labor 
does  not  produce  material  products.  Is  tlieir  Labor  entirely  men- 
tal? Does  not  the  lawyer  perform  physical  Labor  when  he  speaks 
or  writes?  Do  not  authors  perform  physical  Labor  in  communi- 
cating to  the  world  their  mental  products?  In  all  the  affairs  of 
men,  is  there  a single  department  of  l^'.xhov,  pureln  mental?  Not 
one.  If  not,  it  were  better  to  discard  all  unnecessary  distinctions, 
leaving  no  differences  except  those  of  efficiency. 

The  president,  members  of  congress,  lawyers,  judicial  officers, 
and  all  others  whose  Labor  is  su])posed  to  be  intellectual,  are 
merely  Laborers  employed  by  the  Public  to  effect  certain  results. 
Their  compensation,  like  that  of  those  employed  in  other  depart- 
ments of  Labor,  should  be  in  proportion  to  service  given.  There 
is  nothing  in  the  nature  of  the  service  required  at  their  hands,  which 
entitles  them  to  a compensation  greater  than  that  due  equally 


('AUSES  OF  THE  CONKTHCT  BETWEEN  CAPITAL  AND  LABOR.  61 


skilled  Laborers  in  other  departments.  The  notion  that  high 
salaries  attract  a superior  class  of  officials,  is  inconsistent  with  all 
experience;  there  is  not  tlie  least  doubt  that  all  governmental 
operations  would  be  as  well,  if  not  better,  conducted  by  officials 
receiving  the  compensation  due  a skilled  Laborer  in  any  other 
held  plus  tlie  necessary  extra  expenses,  as  they  Avould,  if 
conducted  by  those  demanding  exorbitant  salaries:  the  most 
efficient  Laborers  are,  as  a class,  not  the  most  avaricious.  It  is 
thought,  perhaps  by  most  peojhe,  that  statesmen,  necessarily, 
must  live  in  a style  superior  to  that  of  other  citizens:  this  is 
another  of  those  notions  handed  down  from  an  age  of  superstition, 
in  whicli  the  government  was  supposed  to  be  instituted  by  superior 
beings,  instead  of  by  man  himself. 

It  is  impossible  to  enumerate  all  the  different  departments  of 
Labor;  the  names  of  a few  have  been  mentioned,  merely  to  illus- 
trate the  dehnition  given.  There  is  one  more,  however,  the  sub- 
ject of  much  controversy,  that  demands  a passing  notice : this  is 
banking.  Is  this  a necessary  factor  in  conducting  the  commercial 
affairs  of  the  world  ? Before  answering  this  question,  it  is  neces- 
sary to  ascertain  Avhether  or  not  this  institution  renders  any  assist- 
ance in  the  production  and  distribution  of  wealth.  If  it  is  proven 
to  be  an  efficient  factor  in  the  production  and  distribution  of 
wealth,  the  question  remains,  does  it  equitably  distribute  the 
products  of  industry  among  those  whose  Labor  produces  them  ? 

Those  employed  in  the  department  of  banking  render  import- 
ant service  in  receiving  on  deposit,  the  funds  of  those  otherwise 
engaged;  pay  through  the  instrumentality  of  checks,  drafts,  and 
bills  of  exchange,  debts  due  in  distant  places;  act  as  accountants 
among  those  having  funds  deposited  with  them;  and,  in  various 
other  ways,  render  important  service  in  commercial  affairs.  As 
much  time  and  Labor,  that  without  this  department  would  be 
demanded  of  others,  is  thus  saved,  in  effecting  results  of  vast 
importance,  the  efficiency  of  banking  as  a labor-saving  mechan- 
ism, is  clearly  .shown. 

But  the  most  potent  instrument  of  })roduction  and  exchange 
may  through  misuse,  become  an  unmitigated  evil.  If  those 
engaged  in  banking,  instead  of  receiving  compensation  merely 
for  service  given — to  which,  alone,  they  are  entitled — extort,  by 
any  means,  that  for  Avhich  they  render  no  equivalent,  they  violate 


62  CAUSES  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


the  priaciples  of  equity,  which  should  govern  all  exchanges,  and 
turn  an  otherwise  beneficient  industrial  instrument,  into  an 
engine  of  oppression. 

Banking,  therefore,  like  railroading,  is  a potent  factor  in 
the  industrial  movements  of  the  world : all  mankind  need  the 
services  of  both;  though  they  cannot  afford  to  give  their  liberties 
in  exchange  for  them.  In  these,  as  in  all  other  fields  of  labor, 
the  maxim  holds  good.  “The  laborer  is  worthy  of  his  hire.'’ 

Wages.  This  brings  on  the  subject  relating  to  wages;  What 
are  wages?  There  are  two  answers  given  to  this  question.  1. — 
Wages  are  what  the  laborer  receives  for  his  services.  2. — Wages 
are  the  values  produced  by  labor.  The  first  definition  adapts  the 
term  to  present  usage;  the  second  adapts  it  to  theories  recogniz- 
ing no  profits  as  legitimate,  except  those  resulting  from  greater 
efficiency  of  labor,  through  the  instrumentality  of  exchange. 
The  distinction  between  these  definitions  seems,  to  a superficial 
observer,  not  very  important;  there  is,  however,  a vast  difference 
— a difference  as  great  as  that  between  a ]mrt  and  the  tohole  of 
anything. 

The  man  who  picks  and  carries  home  twelve  quarts  of  ber- 
ries, has  twelve  quarts  of  berries  for  his  labor;  this  is  his  wages  for 
that  work.  In  this  case,  the  wages  are  the  products  of  the  labor. 
If  the  berries  are  consumed  at  home,  no  question  can  arise  as  to 
whether  he  is  fully  compensated  for  his  labor:  that  which  a man’s 
labor  produces  is  his;  he  is  entitled  to  no  more;  he  is  fully  com- 
pensated with  no  less. 

If,  instead  of  consuming  them  at  home,  the  man  exchanges 
the  berries  for  some  other  product  of  labor,  a question  arises  as  to 
the  relative  value  of  the  two.  If  in  the  exchange,  either  party 
gets  a commodity  representing  a greater  service  than  that  repre- 
sented by  the  one  given  in  exchange,  he  gets  more  than  the  prod- 
ucts of  his  labor  while  the  other  gets  less.  This  is  easily  illus- 
trated as  follows:  If  the  value  of  one  commodity  is  represented 
by  10  and  that  of  the  other  by  8,  in  the  exchange,  the  owner  of 
the  latter  gets  10  for  8,  and  the  other  party  gets  8 for  10;  the 
wealth  of  the  former  is  increased  while  that  of  the  latter  is  dimin- 
ished. Had  the  values  exchanged  been  10,000  and  8,000,  the 
gain  to  the  one  would  have  been  2,000,  the  loss  to  the  other  would 
have  been  the  same  amount. 


CAUSES  OF  THE  CONFLICT  BETWEEN  CAriTAT.  AND  LABOB.  63 


It  is  absolutely  indispensable  tliat  the  mind  grasps  firmly  the 
fact,  that  the  exchangeables,  instead  of  being  utilities,  are  values 
resulting  from  services.  The  real  value  of  all  commodities  is  de- 
pendent upon  the  labor  expended  in  their  production;  for  all 
practical  purposes,  the  values  are  easily  estimated.  The  utilities 
of  commodities,  being  dependent  upon  the  benefits  derived  from 
their  use,  no  man  is  capable  of  estimating.  In  the  next  para- 
graph will  begin  a series  of  illustrations  to  prove  more  fully  that 
the  only  estimates  required  in  determining  the  values  of  com- 
modities, have  reference  to  the  labor  expended  in  placing  them 
in  market.  The  illustrations,  though  quite  simple,  will  show  the 
true  economic  relation  of  Capital  and  L ibor. 

A laborer  receives,  for  one  day’s  labor,  a spade  which  is  the 
product  of  a day’s  labor  ecpial  in  efficiency  to  that  for  which  it  is 
exchanged;  this  is  merely  an  exchange  of  equal  services.  No 
matter  when,  where,  or  by  whom  the  spade  was  manufactured, 
the  transaction  is  justified  by  the  equality  of  the  services 
exchanged. 

The  laborer  to  whom  reference  ,was  made  in  the  preceding 
paragraph,  is  now  a capitalist;  his  capital  consists  of  a spade, 
whose  value  is  one  day’s  labor.  If,  with  his  spade,  he  works 
another  day,  in  a neighbor’s  garden,  would  the  neighbor 
compensate  him  by  giving  in  return,  the  result  of  an  e(iually 
efficient  day’s  labor  ? Is  the  laborer  entitled  to  any  compensa- 
tion as  a capitalist  ? If  he  is,  what  is  the  basis  of  this  claim  ? 
Bringing  forward  the  facts  in  the  case,  there  is  not  the  slightest 
difficulty  in  answering  these  questions.  The  laborer  has  worked 
two  days:  he  should  have,  in  exchange  for  his  services,  the 
result  of  two  days’  labor,  of  equal  efficiency.  If  he  receives  from 
his  neighbor,  an  equivalent  for  but  one  day’s  labor,  he  would  then 
have,  in  exchange  for  two  days’  services,  too  little,  as  the  spade, 
the  result  of  one  day’s  labor,  has  been  partly  consumed  by  his 
neighbor.  The  latter,  therefore  should,  in  addition  to  the  com- 
pensation for  one  day’s  labor,  give  an  equivalent  for  the  partial 
consumption  of  the  spade,  the  laborer’s  capital.  In  this  way, 
only,  would  the  laborer  receive  full  compensation  for  two  days’ 
service.  That  such  illustrates  the  true  relation  of  Capital  and 
Labor  defies  contradiction.  The  deterioration  of  the  spade  result- 
ing from  one  day’s  use  is,  indeed,  slight;  it  might  be  inappreci- 


64  CATJSF.S  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 


able,  yet  it  is  soinethiug.  Another  example  will  now  be  given,  in 
which  the  deterioration  of  the  tool  is  an  important  item. 

A laborer  receives,  for  ten  days’  work,  a tool  which  he  uses 
one  hundred  days  in  working  for  another,  the  tool  being  entirely 
worn  out  by  the  operation.  Is  it  not  clear  that  the  one  for  whom 
the  wmrk  is  done,  has  received,  in  this  case,  one  hundred  and  ten 
days’  service  for  which  he  should  give  an  equivalents^  Some  will 
say,  “The  laborer  should  furnish  the  tools.”  Is  this  true^  That 
it  is  not  true  may  be  easily  demonstrated  as  follows : If  the  one 
for  whom  the  labor  is  done,  is  equally  competent  to  do  it  himself, 
he  might  furnish  the  tool  and  employ  his  own  labor  in  the  opera 
tion.  In  this  case,  the  cost  to  him  would  be  110  days’  service: 
10  days’  service  given  for  the  tool;  100  days’  service  given  while 
using  the  tool.  It  matters  not  who  does  the  work,  the  compen- 
sation due  for  the  same  is  an  equivalent  for  one  hundred  and  ten 
days’  service;  ten  days’  in  earning  the  tool;  one  hundred  days’,  in 
working  with  the  same.  Therefore  the  expense  incurred  in  fur- 
nishing tools,  should  be  borne  by  him  for  whom  the  work  is  done; 
otherwise  he  gets  services  for  which  he  gives  nothing  in  return. 

In  previous  illustrations,  tlM3  remarks  were  confined  to  the  case 
of  one  laliorer  and  one  tool;  no  new  principle  would  be  involved, 
if  there  were  many  men  working  with  many  tools.  If  in  manu- 
facturing certain  commodities,  five  men  equally  efficient  as  labor- 
ers, are  required  to  do  the  work,  and  each  incurs  the  same 
expense  in  supplying  himself  with  tools,  the  compensation  due 
each,  should  be  determined  in  precisely  the  same  manner  as  if 
there  were  but  one  man  and  one  tool.  Each  set  of  tools  may 
have  cost  the  same  as  every  other,  and  yet,  the  compensation  due 
for  the  deterioration  of  some,  may  be  very  different  from  that 
due  for  the  use  of  others : in  some  processes,  tools  are  worn  out 
very  much  more  rapidly  than  in  others.  If  each  of  the  live  men 
works,  during  the  year,  three  hundred  days,  those  who  receive  their 
services  or,  whatis  the  same  thing, the  products  of  their  labor,should 
‘ give  in  return  services,  or  what  is  the  same,  products  of  labor, 
sufficient  to  balance  those  received.  If  all  the  tools  used  by  the 
five  men,  are  dimiiiished  in  value  to  the  amount  of  one  hun- 
dred days’  service,  and  all  sets  equally  deteriorated  by  use,  the 
aggregate  compensation  due  is  sixteen  hundred  days’  service: 
fifteen  hundred  for  service  given  during  the  year,  and  one  him- 


CAUSK-i  OF  Till?  COXFIiTCT  liRTW^KX  CAl’ITAIi  AXD  T,A?10Il. 

dred  for  deterioration  of  tools,  the  product  ,pf  former  services. 
The  com[)ensation  due  eacli  of  tlie  five  workmen,  in  this  case,  is 
one-fifth  of  sixteen  hundred,  or  three  hundred  and  twenty  days’ 
servuce,  But,  as  already  intimated,  the  injury  to  one  set  of  tools 
may  be  very  dilTerent  from  that  to  another,  even  though  they  cost 
the  same;  it  is,  therefore,  the  diminution  in  the  value  of  tools  or 
machinery  that  is  to  be  estimated,  instead  of  the  original  cost,  in 
determining  the  compensation  for  their  use.  Besides  the  tools, 
the  laborers  would  need  a shop  and  the  material  out  of  which  the 
commodities  are  to  i)e  made.  Thesd  are  a part  of  the  capital 
emplo^X'd  in  the  business:  the  compensation  due  the  owner  for 
their  use  involves  no  new  principle ; it  has  for  its  support  the 
services  previously  rendered  by  the  owner.  The  sliop  and  mate- 
rial maybe  the  joint  property  of  the  five  workmen,  each  having 
an  e(|ual  interest  in  the  same ; they  may  be  the  individual  property 
of  one;  one  may  owii  the  shop,  anotlier  the  material;  they  may 
own  either  or  both  jointly,  some  having  greater -interests  than 
others.  No  matter  whether  owned  by  one  man  or  a thousand, 
tile  compensation  due  for  the  use  of  Capital  is  based  upon  services 
previously  given  by  the  owner  or  owners.  It  is,  therefore,  uni- 
versally true  that  the  condition  ])recedent  to  all  claims  for 
compensation,  is  services  given  by  the  claimant.  Thhi  being 
admitted,  there  is  no  escape  from  the  conclusion  that  tlie  capital- 
ist is  entitled,  for  the  use  of  his  Capital,  to  a compensation  for  its 
deterioration:  less  than  this  would  be  unjust  to  him;  more  than 
this  would  be  unjust  to  otliers.  This  must  lie  borne  in  mind  in 
all  discussions  relating  to  Capital  and  Labor.  No  custom,  how- 
ever hoary  with  age,  must  be  allowed  to  stand,  if  inconsistent, 
with  the  principles  of  eternal  justice. 

In  closing  the  discussion  of  the  relations  of  Capital  and  Labor, 
a quotation  from  Walker’s  “ Science  of  Wealth,”  will  serve  to 
illustrate  the  current  theories  of  the  distribution  of  wealth  among 
those  engaged  in  its  jiioduction.  This  eminent  American  author 
divides  the  products  of  industry  into  fivx'  parts  as  follows: 
'‘Wages,  profits,  interest,  rent,  and  taxation.”  If  those  to  whom 
one  or  more  of  these  parts  i.s  due,  set  up  a claim  for  more  than 
their  <5(juitab!e  share,  there  necessarily  arises  a eoutiict,  as  the 
false  claims  can  be  allowed  only  by  sacrificing  the  rights  of  one 
or  more  of  the  other  parties.  The  term  profits,  here  mentioned 


OA.n8KM  OP  THK  HKrWKKN  CAPITAl,  A?ST)  I.ABOR. 


is  of  tluit  sjXMncB  properly  named  “spurions,”  in  the  second  P’ssay, 
as  they  permit  one  of  the  parties  to  an  exchange,  to  receive  more 
than  he  gives,  thus  enriching  one  while  necessarily  impoverishing 
another.  If  one  receives  a commodity  equal  in  value  to  $5.00, 
in  exchange  for  one  who.se  value  is  only  $3.00,  the  'wealth  of  the 
one  party  is  diminished  $2.00  wliile  that  of  the  other  is  increased 
to  the  same  extent.  Those  who  attempt  to  justify  this  species  of 
profits,  take  u}X)n  themselves  the  somewhat  difficult  task  of  prov- 
ing that  three  is  equal  to  five.  If  however,  as  here  ii.sed,  profile 
means  comjxmsatiou  due  for  managing  the  bnsine.ss,  the  claim  is 
just,  but  the  term  is  useless;  managing  business  is  labor;  wages  is 
the  compensation  of  labor;  it  therefore  includes  that  due,  for 
nmnagiiig.  Jf  the  term  profits,  in  this  connection,  invariably 
signified  merely  the  compensation  due  the  proprietor  for  manag- 
ing the  buHin(‘,HS,  it  would  be,  at  least,  tolerable,  wludher  nece.s- 
sary  or  not.  Mat  the  fact  tliat  the  claimant  of  this  species  of 
profits  is  su})pased.  to  be  entitled  to  all  he  can  get  irrespective  of 
services  rendered,  makes  this  term  so  powerful  for  mi.schief,  that 
the  best  interests  of  all  demand  its  expulsion  fn)m  the  list  of 
economic  terms.  Instead  of  five,  then,  there  would  rcMuain  but 
four  terms:  Wages,  interest,  rent,  and  taxation. 

The  term,  interest,  meaning  a compensation  for  the  use  of 
money,  is,  perliap.s,  entitled  to  further  illustration  before  closing. 
In  so  far  as  interest  is  value  received  for  the  mere  untiof  money, 
and  not  for  services  given  by  the  recipient,  it  is  inconsistent  with 
any  equitable  distribution  of  the  products  of  industry.  In  this 
sense,  the  claim  fr>r  interest  has,  for  its  support,  the  false  assump- 
tion that  service  may  be  given  through  tlje  use  of  the  products  of 
labor.  It  lias  been  shown,  in  treating  of  Ueut  and  fhipital,  that 
the  only  valid  claim  for  compensation  for  the  use  of  other  species 
of  property,  rests,  for  its  support,  on  the  previous  services  given 
by  the  owner  in  earning  tlic  property.  There  is  nothing  in  the 
nature  of  money  to  give  its  possessor  any  claims  superior  to  those 
conferred  on  the  owners  of  other  species  of  property:  all  property, 
money  included,  is  llie  product  of  Labor.  The  user  of  any 
species  of  property  belonging  to  another,  incurs  an  indebtedness 
equal  to  the  value  consumed  in  the  operation : to  this  extent,  the 
owmer  has  a valid  claim  for  comjiensation  for  services  given: 
beyond  this,  all  claims  are  spurions.  'Idiorefore,  so  far  as  the 


CAUSISH  OF  Trrw  CONFLICT  BKTW'KKN  CAPrrAL  AND  LABOR. 


(57 


money  itself  is  concerned,  the  borrower  discharges  all  obligations 
by  merely  returning  the  sum  borrowed.  If,  however,  interest  is 
merely  a compensation  for  services  given  by  those  engaged  in 
kianing  money,  collecting  debts,  receiving  for  safe-keeping,  or 
convenience,  funds  belonging  to  others,  or  in  any  other  manner, 
assisting  in  the  production  and  distribution  of  wealth,  it,  like 
orolits,  is  a useless  term ; the  term  wages  could  as  w'ell  include 
compensation  for  such  services  as  any  other.  A.s  interest  is  a 
claim  set  up,  by  the  owner  of  money,  for  coni}x.m8ation  for  its  use 
instead  of  services  given  by  him^  it  enables  the  claimant  to  accum- 
ulate wealth  without  protlueing  it:  to  accurniiiate  wealth  with- 
out first  producing  it,  must  iueviiably  indict  a loss  on  the  wealth- 
prod  uceis;  the  wealth  ma^t  be  produced  by  noiru:b<j(Jy  before  its 
accumulation  is  possible.  It  were  better,  therefore,  to  drop  this 
term,  as  it  characterizes  a false  claim  for  a portion  of  the  pro- 
ducts of  industry.  This  leaves  three  terms:  wages,  rent,  and 
(axHtiou. 

It  has  been  concbisively  shoNvn  that  Rent  based  upon  other 
grounds  than  that  of  the  labor  expeuded  in  earning  the  property, 
is  a claim,  on  tlie  part  of  the  owner,  for  the  services  of  others, 
Avithont  giving  anything  in  return.  It  enables  the  owner  to 
acciiiiudate  without  producing,  thus,  iuevitably,  inflicting  los.s 
upon  others,  w'ho  have  less  than  their  due,  Ix-cause  they  have  given 
a part  of  their  weaUh  to  tho.^ie  having  inme  than  their  share.  If 
Rent  mean.s  merely  munpensation  for  laiau- expended  by  the  owner, 
the  term,  like  interest  and  profits,  is  useh'ss,  us  the  term  w'liges 
ineludcs  tin's  aswellastho.se.  Add  to  i Ids  the  fact  that  Kent  is 
commonly  neither  more  nor  less  than  tribute  exacted  from  the 
neccssitie.s  of  others,  and  the  propriety  of  .its  elimination  from  the 
list  of  econoinic:  terms  is  conspicously  apparent.  There  are  now 
but  two  terms  left : wages  and  taxation. 

In  the  true  economic  sense,  a Taxi.sasufu  of  money  demanded 
of  the  citizens  for  the  purpose  of  creating  a fund  out  of  wddeh  to 
pay  those  whose  services  are  given  to  the  public.  Governmental 
affairs  immediately  concern  the  w'hoie  people:  for  tlteui  and  by 
them,  are  all  governments  instituted.  Hence  all  public  officials, 
from  postmaster  to  president,  are  commissioned  by  the  people 
tbem.selves.  If  those  acting  in  an  official  capacity  faithfully 
discharge  the  duties  assigned  them,  they  are  us  truly  entitled  to 


GS  CAiJsi>:s,,()b'  riiii  coafi.ict  bi5t\vkk\  CAi’iTAr.  and  lafiok. 

compensation  for  tlieir  services,  as  they  would  be  were  they  work- 
ing in  any  other  department  of  labor.  There  aia;,  however,  certain 
claims  set  up  in  favor  of  this  department,  which  have  no  loTictd 
basis  to  support  them.  , The  pay  of  Certain  judicial  aiid  of  certain 
militar}’’  otHcers,  does  not  cease  with  their  services,  but  continues 
through  life.  There  is  no  jusdtication  for  this  distinction  in  com- 
pensating public  officers  and  other  doers  of  the  world’s  work. 
The  sum  of  Fuoncy  thus  unrighteously  drawn  from  the  people 
is,  indeed,  snntll,  but  it  is,  nevertlieless,  in  violation  of  the  maxim 
: that  compensation  is  due  only  for  services  rendered  by  the  recip- 
ient. The  millions  recpiiiod  every  ^ufar  to  pay  interest  to  bond- 
holders, is  so  inUch  subtracted  from  the  various  industries  of  the 
country,  for  which  the  recipients  render  no  e(julvalent.  Tliat 
these  creditors  of  tlie  govenunent  would  have  made  no  loans, 
except  in  anticipation  of  such  unrighteoiFS  means  of  accumulating 
wealth,  does  not,  in  the  least,  mitigate  the  iniquity  of  a system 
which  perinits  a da.^s  of  citizens  to  {iptVropriate  a large  sliare  of 
the  products  of  industi'y,  without  contributing,  in.  the  slightest 
degree,  to  their  production.  Therefore,  eliminating  all  spurious 
claims  against  the  government,  the  sum  to  be  raised  by  taxji- 
tion  ’is  merely  that  required  to  compensate  those  w'hose  services 
are  given  to  the  government.  Logically,  then,  the  sum  of  money 
due  in  the  legitimate  sphere  of  taxation,  constitutes  the  fund  out 
of  which  to  pay  the  wages  of  those  svho  the  government. 
Hence  taxation,  in  the  sense  in  which  Mr.  Walker  uses  the  term, 
should,  like  protits,  interest,  and  rent,  be  expelled  as  a mischief- 
maker.  Excluding  all  industrial  parasites,  wages  alone  remain 
' to  be  paid  out  of  all  the  products  of  industry. 

There  is  a false  notion  implied  in  the  use  of  the  term,  wage- 
worker: economic  science  knows  tfo  such  distinction;  it  regards 
all  others  as  wage-workers,  as  much  as  those  to  whom  the  name 
is  applied;  it  knows  no  such  thing  as  cade.  This  may  be  conclu- 
sively proven  by  a simple  illustration  as  follows:  A farm-laborer 
in  Dakota,  receiv'-es  for  bis  labor  oO  bushels  of  wdieat,  which  he 
sells  to  a ucighboring  miller;  the  miller  transports  it  to  his  mill 
and  converts  it  into  dour ; a tlour-merchaat  purchases  the  dour 
for  transportation  to  a distant  market;  the  wholesale  purcJiaaer 
irt  that  market  sells  it  to  the  gi’ocer;  tlie  grocer  sells  it  to  the 
consumer.  Unless  it  is  presumed  that  Providence  has  conferred 
special  rights  upon  some,  and,  consequently,  must  have  witliheld 


^the  same  from  otiiefs,  tliere  must  be 'a  common  basis  to  support 
the  claims  of  all  who  have  in  anywise  been  instruihental  in  sup- 
plying the  consumer  with  the  Hour.  The  farm-laborer  originally 
received  his  wages  in  wheat;  he  exchanges  with  the  miller,  and 
receives  froih  him  a coni  mod  it}’ "of  ecpial  value.  He  htiS  his  wa*ge.s 
still;  no  more,  no  hjss.  Tint  received  from  the  miller  was  aS  truly 
wages  as  was  that  received  from  the  farmer.  In  ultimate  analysis^ 
therefore,  the  income  from  the  sale  of  commodities,  is  neitber 
more  nor  less  than  wages  received  for  producing  them.  If,  as  is 
probable,  the  farm-laborer  expended  labor  in  storing,  or  otherwise 
caring  for  the  wheat  received  from  the  farmer,  he  sho\ild  be  paid 
enough  more  than  the  original  cost  of  the,  same,  to  compensate 
him  for  the  extra  services ; this  does  not,  in  the' least,  alter  the 
fact  tliat  all  received  from  the  miller,  in  exchange  for  the  wheats 
is  merelv  wages  paid  for  service  given  in  producing  it. 

Wages  are  due  tlie  miller  for  services  given  in  earning  what 
he  pays  the  farm-laborer,  transporting  the  wheat  to  mill,  grinding 
the  same,  and  the  consumption  of  wages  previously  earned,  in  the 
partial  consum[)tion  of  his  mill:  thus  the  entire  receipts  of  the 
miller,  like  those  of  the  farm-laborer,  are  wages  paid  him  for  his 
services  by  the  flour-merchant. 

Wages  are  due  the  flour-merchant  for  services  given  in 
earning  what  he  paid  the  miller,  shipping  the  flour,  transporting 
to' market,  or,  what  amounts  to  the  same  thing,  paying  freight 
oharges,  and  all  other  outlays  by  him  in  this  somewhat  complex 
transaction  V rlic  total  sum  of  all  the  items,  kijlthmitel)/ charged 
by  him  coiHtitutos  his  wages':  to  this  he  has  a just  claim;  more 
than  this  is  impossible  wich<mt  sacrificing  the  rights  of  others,  ■ 

The  wholesale  merchant  is  entitled,  to  wages  for  services  given 
in  earning  what  he  paid  for  the  flour,  cartage,  storage,  and  the 
, other,  ivecess.ary  services  in- connection  with  the  transaction:  the 
aggregate  huui  received  for  all  his  services  constitutes  his  wages. 
IjOgically  lie  is  no  less  a wage-worker  than  is- the  farm-laborer. 

When,  jinally,  the  grocer  transfers  the  flour  to  the  consumer, 
the  compeusation  due  the  former,  is  for  services  given  in  earning 
wliat  was  paid  to  the  wholesale-dealer,  cartage,  storage,  carrying 
to  the  consumer,  and  other  services  given  in  connection  with  the 
flour:  for  all  these,  the  grocer  is  antitled  to  compensation  ; like 
all  preceding  partie.s,  lie  rcceive.s  wages  for  his  labor;  he  is, there- 
fore a wage-worker. 


TO  OAUfcsBa  OP  THE  CONFLICT  8BTKWEN  CAPITAL  AND  LABOR. 


From  the  illustration  given  above,  it  appears  that  there  is  no 
special  clnss  to  whom  the  name  wage-worker  appropriately 
belongs:  striclly  speaking,  all  workers  are  wage-workers;  all  the 
weA'Uth  in  Uie  world  coasinU  of  anconmoied  wageit  earned  hy  some- 
hody.  Applied  to  all  workers,  the  term  is  innocent,  though 
useless;  a])pliecl  to  a particular  class,  it  is  productive  of  much 
mischief.  According  to  the  generally  received  opinion,  wage- 
workers  are  an  iriferkn-  class,  lacking  the  ability  to  accumulate 
wealth,  e.xcept  througli  their  labor;  and  business  men  are  a mpe- 
rior  class,  having  the  power  to  produce  wealth  by  magic.  The 
wealth  of  the  millionaire  is,  however,  merely  wages  unconsumed;  if 
he  has  not  been  a wage-w'orker,  his  title  is  defective;  if  he  is  not  a 
wage-worker,  he  can  honestly  accumulate  no  more : as  all  the  wealth 
now  existing  is  the  product  of  labor,  so  must  be  all  future  accu- 
mulations. Vanderbilt  can  uo  more  areate  wealth,  without  labor, 
than  can  the  tramp  on  the  highway;  either,  may  appropriate  what 
others  have  produced — the  former  by  extortion,  the  latter  by 
stealth;  but  as  all  the  wealth  accumulated  in  the  past,  is  tho  pro- 
duct of  labor  uuconsumed,  so  must  be  that  of  the  future. 

tUmaes  of  the  Oof  lie, t hetween  (Japitai  and  Labor.  It  is  not  a 
diflicult  matter,  now,  to  point  out  the  “ Oauses  of  the  Ooufllct 
between  Ca[>ital  and  Labor.'’  All  wealth  appropriated  through 
the  uistrumeutaliiy  of  profits  <isthc  term  is  commonly  interpreted, 
interest  meaning  conijicusation  for  the  mere  use  of  money,  rent  as 
commonly  understood,  and  taxation  except  for  the  wages  of  those 
'Working  for  the  g<)vei-nm('nt,  is  so  much  taken  from  the  wealth- 
producers,  and  transferred  to  others  who  render  no  eipiivaleut 
for  w^hat  is  thus  taken. 

ProfUy  htent,  and.  Ta,v.ation-~\h*i  palmerworm,  the 

locust,  the  carikerworm,  and  the  caterpillar — thene  are  the  para- 
sites wliich  prey  upon  the  fruits  of  industry:  “That  which  the 
palmerworm  hath  left,  hath  the  locust  eaten ; and  that  which 
the  locust  bath  left,  hath  the  cankerworm  oaten;  and  that  which 
■the  cankerworm  liath  left,  hath  the  (taterpillar  eaten.”  These  ace 
the  proximate  causes  of  the  conflict  between  Capital  and  Labor; 
ihe  ultimate  causes  are  the  mistaken  notions  prevailing  as  to  the 
relations  subsisting  among  the  jiroducers  of  vreulth. 

The  cause  of  the  Conflict  is  much  iuterisified  by  the  use  of 
Bwch  terms  as  master,  employer,  servant,  employe,  wnige-worker, 


CAUBR8  OF  THK  CONFt.ICT  BETWEEN  CAPITAL  AND  LABOB.  Tl 

(iomegtic,  and  menial.  The  terras,  master  and  menial,  ought  not 
to  have  survived  the  fall  of  the  institution  of  slavery;  a nation  of 
freemm  have  no  use  for  such  names;  their  retention,  menaces  the 
liberties  of  the  people.  The  use  of  the  other  terms  mentioned,  is 
not  uecessarily  reprehensible,  though  it  is  frequently  made  so  by 
the  spirit  which  calls  them  iuto  u-io.  These  terms  are  commonly 
used  to  distinguish  the  position  of  individuals  in.  the  social  scale; 
a worthless  idler,  whose  support  is  drawn  from  the  products  of 
others'  industry,  stands,  socially,  above  those  wdiose  labor  supplies 
the  unproductive  consumer  with  the  means  of  subsistence. 

The  in.Iieritor  of  millions,  if  living  in  idleness,  is  a thousand- 
fold greater  burden  on  the  industries  of  the  people,  than  is  the 
pauper,  incapable  of  self-support:  both  are  consumers  of  the  pro- 
ducts of  labor;  neither  is  a producer.  As  neither  produces  and 
both  consume,  it  irresistibly  follows  that  the  greater  consumer 
is  the  greater  burden.  It  must  be  remembered  that  the  inherited 
millions  can  frodu-cA  nothing;  they  serve  merely  as  means  through 
which,  under  a false  theory  of  the  nature  of  wealth,  the  possessor 
can^  thou.gh  n(.)t  rightfully,  appropr-i/ite  what  produce.  All 

come  into  the  world  clothed  with  equal  rights  and  burdened  with 
equal  duties.  Neither  of  these  is  inherited  from  ancestors;  both 
are  the  natural  inheritance  of  the  race.  None  can  be  deprived  of 
their  rights;  none  can  shift  their  duties  upon  others;  any  attempt 
to  do  either,  must,  from,  the  nature  of  things,  produce  a conflict. 

Misled  by  the  false  theories  previously  alluded  to,  the  indus- 
trial classes,  fearing  the  penalties  of  social  ostracism  incurred  by 
those  engaged  in  the  drudgeries  of  life,  frequently  become  rest- 
less in  the  presencii  of  the  grievous  wrongs  heaped  upon  them  by 
those  who.se  necessities  do  not  compel  them  to  occupy  the  same 
position.  Those  ])reviovisly  engaged  in  producing  and  accumu- 
lating wealth,  impatient  at  the  meagre  store  acquired  by  so  tedi- 
ous a routine,  abandon  the  fields  of  productive  industry,  and  seek, 
through  speculation,  more  expeditiously  to  acquire  a fortune. 
Not  more  than  one  in  twenty  meet  with  even  moderate  success; 
the  few  gains  are  contingent  upon  the  many  losses.  The  whole 
scheme  of  speculation  is  a mere  lottery,  in  Avhich  the  blan.ks  far 
outnumber  the  prizes.  In  no  speculation  is  there  any  production 
of  wealth;  all  time  spent  in  attempts  to  acquire  wealth  by  such 
methods  is  worse  than  wasted.  Under  such  circumstances  legit- 


72  CAUSIiS  OF  THE  CONFIACT  F.ETWEEN  CAPITAL  AND  I.ATiOK, 

imite  exchanges  are  scarcely  possible,  Yery  few  have  the  moral 
fortitude  to  be  the  victims  rather  than, the  perpetrators  of  a wrong; 
hence,  most  peo})le  rather  cheat  than  be  cheated.  Thus  the 
“Conflict  between  Capital  and  Labor,”  except  in  magnitude, 
differs  not  in  the  least  from  that  manifested  in  the  simplest  ex- 
changes, in  which  each  party  seeks  to  increase  his  wealth,  regard- 
less of  tlie  other’s  welfare. 

Properly  organized,  the  wealth-producing  facilities  in  the 
possession  of  the  American  people,  are  sufficient  to  supply  the 
vrorld,  not  merely  with  necessary  utilities,  but  with  luxuries;  yet 
so  wedded  are  they  to  the  economic  theories  of  the  past,  that 
thousands  of  themselves  are  destitute  in  the  midst  of  the  splendor 
and  luxuries  of  their  own  creating.  In  the  presence  of  such  con- 
ditions it  is  folly  to  assert  that  Capital  and  Labor  are  allies 
instead  of  enemies;  nanles  are  of  comparatively  little  consctpience  ; 
the  conditions  are  of  vital  importance.  The  conflict  exists;  and 
for  its  existence,  there  is  an  adequate  cause.  It  arises  from  at- 
tempts to  adapt  ancient  theories  of  the  distribution  of  wealth  to 
modern  methods  of  production.  Prior  to  the  Great  Rebellion, 
William  H.  Seward,  with  almost  prophetic  wisdom,  declared 
there  was  an  “irrepressible  conflict”  between  freedom  and  slavery; 
.and  the  people  whose  horizon  embraced  only  their  petty  selfish 
interests,  ridiculed  him  as  a fanatic,  for  questioning  the  righteous- 
ness of  an  institution  that  bore  the  seal  of  ages.  But  the  logic 
mf  events  proved  the  great  statesman  scarcely  less  than  seer. 
The  conflict  of  the  forum  was  abandoned  for  that  of  the  field, 
and  what  ought  to  have  been  decided  by  argument,  was  referred 
to  the  arbitrament  of  war.  In  that  convulsion  perished  millions 
-of  men  and  hundreds  of  millions  of  treasure,  in  ridding  the 
world  of  a hideous  monster,  which,  after  robbing  of  their  man- 
;hood  millions  of  the  race,  sought  the  overthrow  of  the  Great 
Republic.  Though  slavery  itself  is  dead,  its  spirit  still  lives  to 
inspire  the  Conflict  between  Capital  and  Labor.  It  will  not  rest 
while  the  congenial  spirit  which  robs  labor  of  its  full  reward, 
•presides  over  the  division  of  the  products  of  industry. 

Unless  the  pernicious  theories  of  exchange  now  prevalent 
rare  soon  abandoned,  the  conflict,  now  apparently  so  harmless, 
will  swell  into  gigantic  proportions,  and  -what  with  proper  pre- 
•cautions  miglit  be  easily  avoided — the  World  will  stand  aghast  at 
rseenes  the  future  has  in  store.  Instead  of  section  against  sec- 


CAUSES  OF  THE  CONELTCT  BETWEEN  CAPITAL  AND  LABOR.  7o 

tfoTi,  aS'in  the  late  rebellion,  it  will  be  nei<;'hbor  against  neigh 
bor — one  chaotic  mass  of  struggling  humanity  in  the  midst  of 
universal  anarchy. 

Those  who  offer  the  law  as  a soverign  remedy  for  all  social, 
commercial,  and  political  evils,  forget  that  legislators  sought  ki 
vain  to  remedy  the  evils  of  slavery.  They  exhausted  all  their 
resources  in  attempts  to  render  harmless  the  most  gigantic  evil 
the  world  ever  saw  ! As  well  might  they,  by  legislative  enact- 
ment, attempt  the  suppression  of  the  thunders  of  Niagara.  Tlie 
only  remedy  for  any  evil  is  its  abandonment;  regulation  by  law 
only  intensifies  it;  any  toleration  by  law  gives  it  legal- existence. 
At  best,  laws  are  merely  bridges  over  which  nations  pass  from, a 
lower  to  a higher  civilization;  they  create  neither  rights  nor 
wrongs.  They  may  protect  the  right  and  repress  the  wrong;  in 
attempting  more,  they  become  a positive  nuisance. 

If  the  theory  of  profits  is  right,  let  the  law  protect  those  who 
secure  them.  If  any  are  due,  there  is  no  limit  to  the  amount ; 
morally  it  is  as  wrong  to  gain,  through  another’s  loss,  one  per 
cent,  as  it  is  to  gain,  in  like  manner,  a thousand  per  cent.  : the 
evil  is  not  a matter  of  magnitude  but  of  principle. 

If  the  theory  of  Interest  is  right,  the  law  has  nothing  to  do 
with  the  matter,  further  than  to  protect  those  who  through  this 
instrumentality  increase  their  store  of  wealth.  No  regulating  us 
to  the  rate  is  permissible;  the  right  to  take  one  per  cent,  implies 
the  right  to  take  a thousand  per  cent. 

If  the  theory  of  Rent  is  right,  the  law  must  in  no  wise  inter- 
fere with  that  right. 

If  the  theory  of  speculation,  in  general,  is  correct,  let  the 
legislator  beware  of  meddling:  rights  demand,  not  regulation, 
but  protection;  wrongs  are  entitled  only  to  repression.  To  sanc- 
tion the  theories  that  result  in  monopoly,  and  then  att-empt  to 
repress  the  evil  is  the  supremest  folly : if  monopolies  are  evils, 
the  theories  of  which  they  are  the  result  are  evils:  “ A good  tree 
cannot  bring  forth  evil  fruit,  neither  can  a corrupt  tree  bring 
forth  good  fruit.”  If  monopolies  are  evils,,  so  must  be  the 
theories  producing  them. 

Before  closing  this  Essay,  it  is  thought  best,  once  more  to 
illustrate  the  injustice  of  the  current  theory  of  profits;  this  is  the 
chief  mischief  maker  in. the  realms  of  exchange;  without  this  for 


74  CA.rr8RS  ok  TITRJ  conflict  BKTWKESN  CA.PITA.L  A.ND  LABOR. 


their  support,  Interest  and  Rent  would  stand  revealed  as  mere 
parasites  upon  the  proceeds  of  industry.  The  following  example 
will  show  the  utter  absurdity  of  this  theory: 

A is  a hardware  merchant,  B,  a dry-goods  merchant,  C,  a 
grfK;er,  and  I),  a farm  laborer.  Suppose  that  A sells  his  goods 
to  the  other  three  parties  at  25  per  cent,  profit;  that  is,  he  gets  25 
per  cent,  more  than  he  gives.  Each  of  the  others,  then,  must 
pay  $1.25  for  one  dollars  worth  of  goods;  this  is  the  same  as 
selling  their  goods  at  20  per  cent,  discount;  they  get  80  cents  for 
a dollar’s  worth  of  their  goods.  If  B,  as  well  as  A,  adds  25  per 
cent,  as  profits  on  his  goods,  he  will  realize  no  gain  in  exchanging 
with  A;  his  profits  must  come  entirely  from  exchanging  with  C 
and  D,  who  receive  no  profits.  If  C,  as  well  as  A and  B,  adds 
25  per  cent,  to  the  price  of  his  good.s,  neither  of  these  three  will 
realize  any  profits  in  exchanging  w^ith  one  another;  the  only 
chance  for  making  profits  is  in  exchanging  with  D,  who  makes 
no  profits.  If  D,  as  well  as  the  other  three,  adds  25  per  cent,  to 
the  price  of  his  labor,  neither  of  the  four  will  realize  any  profits 
in  exchanging  with  another.  If  A alone  makes  a profit,  the 
other  three  must  suffer  a discount.  If  A and  B make  an  equal 
profit,  this  must  come  from  exchanging  with  C and  D,  who  suffer 
a discount.  A and  B would  realize  no  profits  in  exchanging  with 
each  other.  If  A,  B,  and  C make  equal  profits  this  can  result  only 
from  exchanging  with  D,  wdio  makes  no  profit.  If  D’s  wages  are 
advanced  to  correspond  with  the  advances  in  the  prices  of  goods 
sold  by  A,  B,  and  C,  neither  of  the  four  in  exchanging  with  an- 
other could  realize  any  profits.  In  order,  therefore,  tliat  some 
may  realize  a profit,  there  must  be  others  who  suffer  a discount; 
if  some  gain,  others  must  lose.  Blunt,  indeed,  must  be  the  moral 
perceptions  of  those  whose  conscience  is  quiet  in  the  presence  of 
gain  realized  through  this  species  of  profits.  Economic  science 
uninfluenced  by  pernicious  custom,  knows  no  favorites:  its  teach- 
ings are  in  keeping  with  the  principles  of  the  strictest  equity.  It 
justifies  no  profits  realized  by  some,  conditioned  upon  discounts 
suffered  by  others;  its  decisions  are  absolutely  impartial.  The 
income  of  the  hardware  merchant,  the  dry-goods  merchant, 
and  the  grocer,  no  less  than  that  of  the  farm  labonm,  must,  in 
equity  be  based  upon  the  service  given.  Those,  only,  are  legiti- 
mate profits  which  are  realized  through  the  increased  utilities 


CATJSKS  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOH.  7G 

growing  out  of  the  greater  efficiency  of  labor  resulting  from  the 
division  of  the  world’s  work  into  the  numerous  departments 
demanded  by  the  mutual  welfare  of  all.  These,  and  these  alone, 
are  the  profits  sanctioned  by  economic  science;  inspired  by  the 
anticipation  of  mutual  gain  resulting  from  mutual  services, 
exchanges  are  wholly  And  infinitely  beneficent.  The  littlone>s 
displayed  in  the  tricks  of  trade,  inspired  by  an  impulse  wholly 
selfish,  is  a disgrace  to  the  age,  and  a menace  to  civilization. 

If  the  theory  of  Profits  advanced  in  this  Essay  is  the  correct 
one,  we  have  the  key  to  the  relations  of  Capital  and  Labor.  It 
will  pay  to  trace  the  relations  in  the  following  example: 

A manufacturing  establishment  employs  12  hands  besides 
the  superintendent,  who  is  himself  the  owner.  ‘Four  of  the 
hands  are  unskilled ; four  possess  that  degree  of  skill  render- 
ing their  efficiency  double  that  of  the  first  four;  the  third  four  are 
three  times  as  efficient  as  the  first;  the  efficiency  of  the  super- 
intendent is  five  times  that  of  either  of  the  first  four;  and  the 
deterioration  of  the  capital  during  the  year  is  equal  to  1,000  days’ 
labor,  each  equal  in  efficiency  to  that  of  the  unskilled  laborers. 
If  all  are  employed  300  days,  the  record  will  stand  as  follows: 


Pour  men  of  ordinary  efladency,  each  working  300  days 1,200  dajs 

Four  men  of  double  ordinary  efidciency,  each  working  300  days 2,400  “ 

Poor  men  of  three  times  ordinary  efficiency,  each  working  300  days 3,600  “ 

Superintendent,  five  degrees  ordinary  efficiency,  working  300  days 1.500  •* 

Deterioration  of  capital • 1.000  “ _ 


Total  service  given  by  the  establishment 9,700  days 


This  establishment  having,  in  the  aggregate,  given  9,700 
days’  service  of  ordinary  efficiency,  is  entitled  to  an  equal  service, 
in  the  aggregate,  from  those  who  receive  the  products  of  their 
labor.  The  proprietor  is  entitled  to  1000  days’  .service  for  deteri- 
oration of  capital,  and  1,500  days’  service  for  superintending — 
total  2,500  days;  each  of  the  ordinary  w'orkmen  is  entitled  to  300; 
each  of  the  second  grade,  600;  each  of  the  highest  grade,  900,  la 
addition  to  what  is  assigned  to  him.  above,  the  proprietor  has  no 
claim  for  profits;  he,  like  his  companions  in  labor,  is  entitled  to 
compensation  for  his  services:  justice  gives  him  this;  it  cannot 
possibly  grant  him  more.  He  can  get  no  more,  except  by  taking 
what  belongs  to  his  fellow  workmen  or  from  those  who  receive 
the  goods.  No  matter  what  may  be  the  number  or  the  necessi- 
ties of  the  workmen;  they  may  be  few  or  many;  they  may  be 


\ 

76  • CAUSK6  OF  THE  CONFLJn'.  BETWEEX  ( AFITAI.  AXD  LAIiOK. 

pinched  with,  j)overty  or  blessed  with  abundance-  . Ail  sucli  inci- 
dents are  totally  ineievant ; the  coni})ensation  due  is  for  service 
given,  and  for  that  alone.  It  is  a false  theory,  unworthy  the 
civilization  of  the  Nineteenth  Century,  that  makes  the  compen- 
sation for  services  dependent  upon  anything  else  than  the  service 
itself.  All  attempts  to  perj)etuate  such*a  theory  is  at  war  with 
the  teachings  of  economic  science,  whose  laws  are  inexorable,  and 
cannot  be  violated  with  im]mnity.  So  long  as  such  theory  is  in 
vogue,  the.  Conflict  between  Capital  and  Labor”  will  go  on 
with  constantly  increasing  intensity,  as  time  advances,  until, 
de.spairing  of  justice  through  the  instrumentality  of  government, 
the  v/ealth-producers,  either  wisely  or  unwisely,  will  trample' 
beneath  their  feet  constitutions  and  laws,  seeing  in  them  nothing 
but  engines  for  the  perpetuation  of  ancient  schemes,'  shrewdly  - 
d(isigned  to  per])etuate  the  humiliation  and  degradation  of  tlie-- 
telling  millidns.  ’ There  is  no  w’ay  of  avoiding  the  result  except 
by  removing  the' cause.  Politicarconventions  will  strive  in  vain  • 
to  exorcise  the  evil  spirit  by  inserting  new  })lanks  in  their  plat- 
forms; legislators  will  prove  unequal  to  the  task  of  Teguluting 
that  widclr justice' demands  shall  be  abolished;  oratoi-s  cannot 
imbue  with  patriotic  spirit  those  who  see' no  practical  dilference 
between  republican  liberty  and  monarchical  despotism.  Laborers, 
combining  for  mutual  protection ; farmers  attempting  through] 
legislative  enactments  to  fix  freight  rates  on  the  railroads;  rail-' 
road  companies  engaged  in  ])er]3etual  war,  each  striving  for  the 
lion’s  share  of  trans])ortation ; and  liank  officials  en  route  for 
Canada,  are  only  dilTerent  phases  of  the  diseased  social  condition 
resulting  from  false  economic  theories.  The  laborers  remain  in 
the  country  and  strike  for  justice;  bank  officials  not  overly  par- 
ticular to  the  claims  of  justice,  strike  for  a foreign  land.  These 
latter  are,  perhaps,  the  most  perfectly  developed  specimens  of  tlie 
fruits  of  that  theory  of  profits  which  permits  the  recipients  to  take 
more  than  they  give  in  exchange.  There  can  be  no  question  that 
the  character  of  an  economic  theory,  like  that  of  a tree,  is  known 
by  its  fruits.  This  being  conceded,  either  the  exiled  bank  offi- 
cials are  lionorable  gentlemen  involuntarily  sojourning  in  a foreign 
land,  or  the  theory  of  which  they  are  the  legitimate  fruit,  is 
inconsistent  with  financial  integrity.  Is  it  not  customary  to  speak 
in  complimentary  terms  of  those  ca[)ablc  of  living  by  their  wits? 
Is  it  not  currently  thought  to  be  more  re[)utable  to  mal:e  money 


(\\.usp:s  of  TErfi  conflict  uktwhkn  capital  and  r-AHoii.  77 

by  shrewd  decices  thad  to  e irn  it  by  honest  ihdd'Htri/'l  Docs' hot 
the  current  theory  of  profits  give  countenance  to  such  monstrous 
d )Ctrines?  Tlie  fact  is,  that  the  final  act  of  the  bank  officials,  in 
appropriating  to  their  own  use  the  funds  entrusted  to  their  care, 
invQlves  no  new  principle.  Their  lixes  have  been  spent  in  shrewdiy 
scheming,  through  the  instrumentalities  of  unholy  profits,  to 
‘ippropriate  the  products  of  industry  without  giving  that  service 
which  alone  is  the  basis  of  all  honestly  accumulated  wealth' 
Those  who,  within  the  law,  violate  the  principles  of  natural  eijuity,  ' 
for  the  sake  of  pecuniary  gain,  will  carry  their  schemes  outside  of 
the  law,  when  the  temptation  is  strong  and  the  chance  of  detec- 
tion remote.  ' • ’ ' 

. Those  who  carefully  note  ‘the  manifestations  pf  the  spirit 
dominant  in  the  commercial  w'orld,  cannot  fail  to  see. that,  instead 
of  merely  a conliict  between  Capital  and  Labor,  there.is  aomC  , 
conflict  throughput -all  tlie  realms  of  exchange.'  .Itsgreat- 
estdnrensity.'is  apparent  between  those  in  possession  of  opportun-  ^ 
ities  for  accumulating  wpalth,  and  those  wanting  such,  opportun.-  , 
ities.  The  current  thepry  recognizing  no  fixed  relation  between 
the.  .parties  to  an  exchange,  leaves.  ..them  to.  settle  thC|  Com.p.cnsa-: . ^ 
tion  due,  without  any,  definite  standard  to... which  they. can  con- 
fidently  appeal.  Those . controlling  the  materials  out  of  which  .. 
are  .fashioned  all  the  utilities  which  constitute  the  world’s  v/ealth,  .. 
feci  jus'tified  in  exacting,  from  those  in  want  .of  these  materials, 
such  terms  as  the  uecessities  of  the  latter  mey  force  them  to 
accept.  Ordinarily,  the  laborer  mu.st  accept  the  be.st  terms  lie 
can  get  to-dny:  his  neces^itiea  will  not  permit  him  to  hold  put 
against  those  who  have  on  hand  the  means  of  subsistence  for 
months  or  years  to  come.  Under  such  circumstances  the  present 
producers  of  wealth,  except  those  who  have  already  accumulated 
a store  sufficient  for  present  needs,  are  victims  of  extortion,  so 
clear  and  positive,  that  it  is  a wonder  how  a people  calling  them- 
selves Christians  can  countenance  a theory  which  permits  such 
monstrous  injiis^ce.  Yet  there  it  is,  .guilty  of  the  crimes  of  tlious- 
ands  of  years,  threatening  the  very  existence  of  republican  liberty. 

He  is  not  a freeman,  who  must  part  with  the  products  of  his 
industry  on  terms  exacted  from  his  necessities.  Tlie  current 
theory  of  the  relations  of  Capital  and  Labor  must  give  place  to 
one  that  shall  secure  to  the  laborer  full  compensation  for  his  ser- 


78  CAUSES  OP'THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 

vices,  irrespective  of  his  necessities  or  misfortunes,  or  of  the  oppor- 
tunities of  others;  the  conflict  must  2:0  on;  or  the  spirit  of  liberty 
must  be  extinguished.  God  grant  that  no  such  calamity  shall 
befall  the  A.mericau  people  as  would  be  upon  us,  if  the  laborers 
should,  without  protest,  accept  the  niggardly  pittance  assigned 
them  by  a theory  that  has  impoverished  the  great  masses  in  all 
lands.  Also,  may  the  sons  of  industry  remember,  that  physv'al 
force  can  right  no  wrongs  in  the  moral  world.  The  only  way 
out  of  the  labyrinth  into  which  we  have  been  induced  to  enter, 
through  the  false  teachings  of  the  economists  who  seek  the  key 
to  economic  science  in  the  precedents  recorded  in  the  history  of 
the  gloomy  past,  is  to  turn  our  attention  to  the  living  present, 
and  study  the  relations  of  men,  in  the  light  of  the  true  spirit  of 
the  civilization  of  the  Ninteenth  Century. 

RecxipituUitlon.  Interest,  in  the  common  acceptation  of 
that  term,  is  at  war  with  the  equitable  distribution  of  the  world’.s 
wealth ; it  permits  the  recipients  of  the  products  of  labor,  through 
this  instrumentality,  to  appropriate  what  others  produce,  giving 
nothing  in  return.  It  can  be  justified  only  as  a compemsation  for 
service  given  by  the  recipient  in  connection  with  various  instru- 
mentalities of  exchange.  In  this  latter  sense,  it  in  no  wise  differs 
from  the  compensation  due  other  laborers;  it  is  the  wages  of 
those  who  perform  this  species  of  service. 

Rent,  as  generally  interpreted,  being  compensation  for  the 
use  of  real  estate,  like  Interest  similarly  interpreted,  is  wealth 
merely  appropriated  by  the  owner  who  gives  nothing  in  exchange 
for  what  he  thus  gets.  It  can  be  justified,  only  as  a compensa- 
tion for  service  given  in  connection  with  the  property  rented, 
the  service  given  may  have  been  in  improving  lands,  or  construct- 
ing or  repairing  buildings.  The  indispensable  condition  pre- 
cedent to  the  rightful  appropriation  of  wealth,  is  personal  service, 
the  sole  creator  of  individual  wealth. 

Profits,  Interest,  Rent,  and  Taxes,  so  far  as  they  permit  cer- 
tain individuals  to  appropriate  of  the  products  Ckf  labor,  a greater 
share  than  their  wages  due  for  service  given,  are  parasites  upou 
industry  ; the  highest  interests  of  all  demand  their  immediate, 
total  extermination. 

Capital,  that  portion  of  the  wealth  of  the  country  used  in 
further  production,  sets  up  spurious  claims  fora  share  of  the  pro- 


CAUSES  OB’  THE  CONFLICT  BF.TWKKN  CAPITAL  AND  LABOR,  79 


<]u€ts  of  indvistry,  which  can  be  allowed  only  by  sacrificing  the 
rights  of  the  wealth-producers  destitute  of  Capital.  Under  the 
terms,  Kent,  Interest,  and  Profits,  the  capitalists  appropriate  the 
products  of  labor  without  contributing  anything  to  their  produc- 
tion ; every  particle  of  wealth  so  appropriated,  is  at  the  expense  of 
Itt>x)rers  without  Capital.  Nothing  is  due  the  capitalist,  as  such, 
but  compensation  for  wealth  consumed  in  the  use  to  which  it  is 
applied.  If  besides  furnishing  the  Capital,  those  who  furnish  it 
also  superintend  the  operations  in  which  it  is  used,  they  have  a 
legitimate  claim  for  wages  thus  earned.  A rigid  analysis  of  the 
relations  of  the  laborer  and  the  capitalist,  discloses  the  fact  that 
the  latter  has  no  legitimate  means  of  accumulating  w’ealth  not 
possessed  by  the  former:  all  wealth  is  merely  unconsumed  wages. 
If  by  a year’s  use  the  capitalist’s  previously  accumulated  wealth 
is  diminished  $1,000,  and  his  services  in  superintending  the 
operations  in  which  it  is  used  are  worth  $2,000,  he  has  a valid 
claim  for  $3,000,  as  his  share  of  the  products.  An  equally  effi- 
cient laborer  without  Capital,  would  be  entitled  to  the  same  salary 
for  his  year’s  service  as  would  the  capitalist  for  his;  the  thou- 
sand dollars  extra  received  by  the  latter  is  for  consumption  of  his 
previously  earned  wealth. 

The  laborer  is  entitled  to  the  product  of  his  labor,  or,  which 
is  the  same  thing,  he  is  entitled  to  receive  the  product  ot  an  equal 
amount  of  labor  of  the  same  degree  of  efficiency.  No  matter 
whether  he  was  born  beneath  the  “ Stars  and  Stripes,”  among  the 
icebergs  of  the  polar  regions,  or  in  the  land  of  tropical  fruits  and 
fiowers,  the  law  is  universal:  the  products  of  labor  belong  to 
those  whose  labor  produces  them.  That  theory  which  assigns  to 
the  laborer  what  is  left  after  the  capitalist  has  appropriated  as 
Profits,  Interest,  Kent,  Taxes,  and  Wages  of  superintendence, 
the  greater  part  of  the  products  of  industry,  is  responsible,  not 
merely  for  the  conflict  between  “ Capital  and  Labor,”  it  is  respon- 
sible for  that  universal  conflict  in  which  wealth  is  won  without 
merit,  and  poverty  incurred  without  fault.  That  the  products  of 
jabor  are  not  equitably  divided  among  the  producers,  is,  perhaps, 
not  the  fault  of  any  particular  class:  with  few  exceptions,  all 
sanction  the  pernicious  theory,  which,  instead  of  assigning  to 
each  that  portion  of  the  World’s  wealth  to  which,  irrespective  of 
custom  or  law,  he  is,  iu  return  for  his  services,  justly  entitled, 
makes  the  accumulation  of  wealth  a game  of  chance. 


REVIEW  AND  CONC  LUSION. 

If  there  is  any  criterion  by  which  the  relative  rights  of  indi- 
viduals can  l)e  determined,  it  must  be  conceded  that,  so  far  as 
wealth  is  concerned,  each  begins  his  earthly  career  clothed  with 
precisely  the  same  rights  possessed  by  every  other.  Before  mod- 
ified by  individuals,  the  bounties  of  nature  are  the  joint  inherit- 
ance of  the  whole  human  race.  Except  from  the  hand  of  the 
laborer,  nothing  is  valuable;  that  is,  not  specially  related  to  any 
individnal.  Labor,  therefore,  is  the  creator  of  all  value,  and  the 
values  of  commodities  are  in  pro])ortion  to  the  labor  of  which 
they  are  the  product.  Nature’s  laws,  not  in  a political  sense, 
like  those  of  the  Medes  and  Persians,  but  in  the  absolute  sense, 
are  unchangeable;  what  they  have  been  in  the  past,  they  are  now% 
and  so  will  be  forever.  Ancient  customs,  wars,  imperial  edicts, 
political  conventions,  constitutions — either  or  all — can  no  more 
suspend  the  operations  of  economic  law,  than  they  can  those 
which  determine  tlie  movements  of  the  heavenly  bodies.  If 
primitive  man  could  obtain  wealth  only  1 hrough  his  industry, 
this  is  the  indispensable  condition  precedent  to  the  accumulation  of 
wealth  to-day.  It  is  not  true  that  mere  occupancy  is  suliicient  to 
invest  the  occupant  with  the  absolute  right  of  property,  in  ev'cn 
the  smallest  portion  of  the  earth;  the  admission  of  the  fact  that 
anotiier  would  not  be  justilied  in  ejecting  him,  in  no  way  con- 
cedes the  right  of  property  in  tlie  occupant;  to  justify  ejectment, 
the  title  must  be  in  the  ejector;  want  of  title  in  the  occupant,  is 
not  sufficient.  The  moment  the  mere  occupant  of  a piece  of 
land  vacates  it,  another,  without  violating  any  rigid  of  private 
property,  may  take  possessitui.  When  Columbus,  after  years  of 
toil,disai)pointmenl,  and  tribulation,  led  the  way  to  the  discov- 
ery of  a new  continent,  he  rendered  a^reat  service  to  mankind, 
for  which  he  was  entitled  to  due  compensation ; but  neither  lie 
nor  the  sovereigns  of  Castile  and  Leon  became  the  owners,  even 
of  the  West  Indies,  much  less  were  they  tiie  owners  of  the  Amer- 


CAUSES  OK  THE  CONFJACT  BETWEEN  CAPITAL  AND  LABOB.  81 

ican  Continent.  Notwitlistanding  the  customary  pomp  and  cere- 
mony witli  whicli  Columbus  took  possession,  tlie  right  of  the 
aborigines  to  their  rude  improvements,  were  as  if  the  Spaniards 
had  never  come:  the  right  of  a feeble  people  to  their  meagre  store 
does  hot  cease  with  their  ability  to  defend  it.  AVhat  the  Indian 
had  improved  Avas  his  by  divine  right;-  what  was  unimproved 
was  the  inheritance  of  the  llace : no  amount  of  ceremony,  how- 
ever pompous  or  solemn,  can  cixmc  or  annihilate  the  right  of  pri- 
vate ])roperty.  The  bounties  of  nature,  inlinite  in  utility,  are.  free 
to  all ; they  are  not  subject  to  barter  and  sale;  hence,  they  are 
not  valuable.  All  nature’s  products  modified  by  the  hand  of 
man  is'individual  property : in  spite  of  custom  or  law,  these  be- 
long to  those  whose  industry  produces  them.  Each  individual  is 
the  owner  of  the  ))r!/ducts  of  his  industry,  be  he  Greek  or  Jew, 
heathen  or  Christian,  rich  or  poor — nothing  is,  m the  least  de- 
gree, relevant  except  the  labor  expended  in  production ; this  is 
the  indispensable  and  only  condition  precedent  to  ownership.  It 
was  so  in  the  beginning,  is  now,  and  ever  will  be;  the  dwarfish 
arm  of  the  stickler  for  precedent  will  strive  in  vain  to  alter  this 
fundamental  fact  of  economic  science. 

Providence  has  so  ordained  that,  without  exchange  of  ser- 
vices, all  must  remain  forever  poor;  annihilate  all  but  a fcAV 
thousands  of  the  people  of  the  United  States  and  divide  all  the 
weal  til  among  those  left,  and  in  a comparatively  short  time,  pov- 
erty would  be  the  lot  of  all.  Wealth  is  conditioned  upon  a nu- 
tiierous  population ; properly  organized,  the  greater  the  indust- 
rhil  population,  the  greater  will  be  the  wealth,  not  merely  in  the 
aggregate,  but  pro  rata.  Let  labor  be  properly  organized  and 
each  laborer  receive  the'  2^1’oducts  of  his  own  industry,  or  which 
is  the  same  thing,  a just  equivalent  for  the  service  rendered  in 
production,  and  the  apparent  paradox  of  a pepole  becoming  im- 
poverished from  a superabundance  of  industry  will  forever  disap- 
pear. If  it  were  , true,  as  taught  by  eminent  economists,  that 
the  wealth  of  each  producer  is  in  an  inverse  ratio  to  their  num- 
ber, there  would,  indeed,  be  an  “ irrepressible  conflict,”  not  merely 
between  Capital  and  Labor,  but  among  the  laborers  themselves. 
But,  fortunately,  such  is  not  the  fact;  the  wage-fund  theory  is 
inconsistent  with  the  principles  of  production  and  exchange. 
This  theory  supposes  that  there  are  two  classes — laborers  and 


■^2  CAUSKfl  OF  THK  CONFLICri'  BKTWRKN  CAlMTAli  AND  tABOR, 


employers;  the  former  being  dependent  upon  the  latter  for  their 
fubsistence.  The  real  fact  is  that  all  who  are  not  parasites  on  the 
fruits  of  industry,  are  both.  If  A,  who  has  accumulated  no 
wealth,  works  for  B,  who  lias  in  store  wealth,  the  product  of  his 
previous  industry,  each  employs  the  other,  A giving  his  present 
services  in  exchange  for  the  products  of  services  previously  rend- 
ered by  B.  If,  because  of  superior  opportunities,  B exacts  from 
A,  more  than  the  latter  receives  from  the  former,  .the  excess  taken 
by  B is  wrested  from  A by  force;  B gets  a part  of  A’s wealth  for 
nothing.  No  pettifogging  about  the  “laws  of  trade,”  can  shake 
this  conclusion.  The  fact  that  such  things  are  done  every  day 
and  have  been  for  hundreds  of  years,  no  more  justitios  such  deeds 
than  did  immemorial  usage  justify  the  Algerian  practice  of  plund- 
ering merchant-men  sailing  the  Mediterranean.  Nothing  is  more 
fallacious  than  is  the  doctrine  that  conscience  invariably,  a 
safe  monitor;  conscience  may  be  siient  in  the  presence  of  the  most 
glaring  iniquity.  To  say  nothing  of  the  offence.s  committed 
against  the  inalienable  rights  of  man  during  the  preceding  thou- 
sands of  years,  where  slept  the  conscience  of  the  slave-holders  and 
their  aiders  and  abettors,  through  the  two  and  a half  centuries, 
culminating  in  tlie  Great  Rebellion  inspired  by  the  hope  of  per- 
petuating an  institution  at  war  with  enlightened  conscience,  yet 
sanctioned  by  the  immemorial  customs  of  the  past!  Judging  by 
the  devotion  with  wliich  the  slave-holder  adhered  to  the  fortunes 
of  the  “ Confederacy,”  his  conscience  was  as  serene  as  was  that  of 
the  abolitionist,  who  prayed  that  the  in.stitution  of  slavery  might 
be  swept  from  the  face  of  the  earth.  This  doc.s  not  prove  that  a 
practice  is  indifferently  right  or  wrong,  depending  merely  upon 
the  opinions  of  men;  it  merely  proves  that  opinions  based  upon 
ancient  usage  require  frequent  revision ; no  precedent  must 
stand  in  tlie  way  of  wilder  experience  and  more  light. 

There  are,  then,  no  such  special  classes  a.s  employers  and 
employes;  all  seeking  exchange  wdth  their  fellow  men  are  botli. 
Both  parties  to  an  exchange  may  bring  yresent  services,  or  com- 
modities, the  product  of  services,  or  one  may  bring ser- 
vices and  the  other  commodities  representing  hisjpas^  labor.  In  deter- 
mining the  relative  values  in  market,  no  estimates  are,  in  the  least 
degree,  relevant  except  as  to  the  relative  services  involved  in  the 
transaction.  If  the  exchanges  are  in  harmony  with  the  principles  of 
equity,  the  nece.ssities,  opportunities,  desires,  or  shrewdness  of 


CAU8BH  OF  TRR  CGiNFLICr  BKTWKBN  CAPITAli  AND  LABOR.  8" 


either  or  both  parties  are  wholly  immaterial;  these  have  no  more 
infloence  in  determining  values  than  in  determining  weight  or 
magnitude. 

That  species  of  profits  which,  if  realized  by  one,  are  secured 
only  because  an  equal  loss  is  sustained  by  another,  has,  to  recom- 
mend it,  neither  justice  nor  necessity.  It  degrades  exchanges, 
otherwise  beneficent  and  ennobling,  to  the  low  level  of  a mere 
game  of  chance,  between  which  and  outright  gambling,  the  moral 
line  of  deraarkation  is  wholh"  imperceptible.  The  stock*gambler 
in  Wall  Street  and  the  tramp  on  the  highway  are  the  legitimate 
fruits  of  this  pernicious  theory  of  exchange;  in  vain  will  society 
hurt  maleflictions  against  either  of  these  or  other  similar  burdens 
upon  industry,  so  long  as  custom  upholds  the  theory  which  pro- 
duces them.  If  this  species  of  profits  is  justifiable  oa  a smaL 
scale,  it  is  justifiable  on  a large  scale;  if  one  may  rightfully  take 
more  than  he  gives,  he  may  take  something  for  nothing.  The 
hoy  in  the  street  playing  marbles  “for  keeps,”  is  the  prototyj>e 
of  the  speculator  in  stocks;  the  former  is  the  opening  blossom, 
the  latter,  the  fully  developed  fruit  of  that  species  of  profits  cur- 
rently thought  to  be  the  only  inducements  to  exchange.  This 
theory  Ls  responsible  for  the  almost  universal  opinion  that  there  is 
nooessnrily  a conflict  of  interests  in  the  world’s  commerce ; hence  the 
deception,  the  strategy,  and  the  low  cunning  manifest  in  all  marts 
of  exchange;  hence,  the  conflict  between  “Capital  and  Labor.” 

That  sjjecies  of  profits  resulting  from  the  greater  efficiency  of 
labor,  growing  out  of  the  division  of  the  world’s  industry  into  the 
various  departments  required  to  produce  and  distribute  the  com- 
modities desired  by  all,  is  in  accordance  with  the  requirements  of 
the  most  perfect  equity,  and  offers  sufficient  inducements  to  bring 
forth  the  best  efforts  of  all  men,  till  time  shall  be  no  more.  The 
shoemaker  may  exchange  with  the  mason,  the  carpenter,  the 
farmer,  the  wood-chopper,  the  miner,  the  sailor,  the  dry-goods 
merchant,  the  gi'ocer,  the  hardware  merchant,  the  watch-maker, 
the  blacksmith,  the  brakernan,  the  engineer,  the  conductor,  the 
clerk,  the  book-keeper,  the  banker,  the  teacher,  the  inventor,  the 
minister,  the  physician,  the  town,  county,  state,  and  national 
officials,  and  others  giving  useful  services;  each  laborer,  in  any 
department,  may  exchange  with  those  in  every  other,  and  through 
the  greater  efficiency  of  labor  thus  secured,  immeasurably  in- 


crease  liis  wealth;  at  the  same  time,  adding  to  the  wealth  of 
those  with  whom  he.- exchanges.  If  industrious^  the  ordinarily 
ethcierit  laborer  dcom'  enough  to  supply  . himself  and  his  family', 
with  all  the  necesmries  and  many  of  the  of  life  ; but  in 

conse(]uence  of  .false  theories  of  exchange,  he  ■frequently  geU 
neither.  This,  fact  is  recpgnfee.d  and  acknowledged,  , perhaps,  by 
most  economists;  but,  wedded  to  the  past,  most,  of.  t,)iem  fail  to 
detect  the  cause  of  this  great  in.justice.  The,y  talk  of  “fair 
prolits,”  “reasonable  protits,”  “ e(|ual  prolits,”  . “ fair  wages,”. 
“re.asonable  wages,”  “wages  .s.ufficient  to  support  the  laborers,” 
and  ‘‘.wages  justitle.d  by.the  rate  of  profits.”  Few  of  them  seem 
to  recognize  tlie.  fact  that  no  profits  are  fair,  reasonable,  or  equal, 
except  those  resulting  from  superior  efficiency  of  labor  secured  by 
the  exchange  of  services,  and  that  no  wuages.are  fair  or  reasonably, 
if  greater  or  less  than  the  products-  of  .labor.  “ Wages  sufficient 
to  support  the  laborer,”  implies  that  there  is  a special  class  of  in- 
dustrious  people  who-  are  entitled-ito  a bare.-liying.;  all  beyond, 
this'  goes  to  make  up  the  profits  of  that  class  who,  somel>o\y  or  \ 
other,  are  presumed  to  f-iave  a right  to  a large,  part  of  the  wealth., 
produced  by  others;  ho wthey  - came  by  this  right,  no  .economist  , 
hcis'  -yet  explained.  To  be -sure- vague,  assertions  are.made  .with  _ 
reference  to  “ great  brain  power,”  ‘f, superior  executive,  ability*”, 
“shrewd  management,”  “ wise  forecast  of  the. market, ” etc.;  but 
these  are  hardhr  definite  enough  to  settle  a point  of  so  much  im- 
portance; to  ordinary  comprehension,  they  seem  entirely  irrele- 
vant. In  consequence  of  the  inherent  diHiculty  of  the  question^ 
however,  no  better  explanation  is,  perhaps,  possible;  no  better, 
tlierefore,  need  I'l  antif'iuated.  To  prove  the  existence  of'a  non-  • 
entity  is  a r dhijL  uidicult  task. 

The  President  of  the  United  States  receives  a yearly  salary 
of  •'5^50,000 — 125,000  more  than  was  paid  Abraham  Lincoln  during 
the  high  prices  of  w.ir  times.  It  is  said  that  he  managed  to 
save  a respectable  sum  each  year;  if  this  is  true,  the  salary  of  the 
President,  at  [)resent,  is  exorbitant.  How  then  about  the  in- 
come of  W.  II.  Vanderbilt,  said  to  be,  probably  $10,000,000 — suffi- 
cient to  pay  the  presidential  salary  200  years ! The  farmer  who, 
at  the  age  of  sixty,  has  saved  a farm  valued  at  $10,000,  has  been 
more  than  ordinarily  successful;  this  is  the  unconsumed  wages  of 
forty  years.  The  value  of  one  thousand  such  farms  is  annually 


CAUPKS  OF  THE  CONFLICT  IJETWEEX  CAPITA  I-  AND  J.AUOK. 

swept  into  the  cotf(‘i'S  ()f  him  whose  motto  is  said  to  be,  “The 
people  be  damned!  ” The  farm-laborer  who  should  receive  $.7()0 
for  a 3'eaV’s  servic(3,  Would  think  himself  generouslv'  compensated; 
yet  S?U),0()0,000  would  pay  an  army  of  such  laborers  20,00  0 
strong!  If  such  are  the  aspects  presented  by  an’ income  of  $10,- 
000,000,  how  about  the  principal  from  which  it  is  derived,  esti- 
mated at  $200,000,000?  It  must  not  be  forgotten  that  all  legiti- 
mately accumulated  wealth,  is  the  uncoUsumed  wages  of  the 
possessor.  Assuming  that  the  Presidential^  salary  is  a sufficient' 
compensation  for  any  one  man,  <Tnd  allnwing  nothing  for  ex[)en- 
ses,  it  would  rcipiire  .4,000  years  tU  save' ’$200,000,000;  The 
entire  wealth  of  the  people  of  the' United  States  is  estimated  at 
something  like  , $50, 000, 000, 000 ; $200,000,000  is  1-250  part  Of 
the  whole;  therefore  one  man  is  in  possession  of  1-250  part  o'f  the 
w(5'alth  of  the  nation.  The’  average  annual  income  of  hiiilidns  of 
industrious’laborers  is,' perhaps,  not  more  than  $200:  after  paying 
speculative  prices  for  the  necessaries  of  lifeb  how  nluch  can  they 
save,  or  expend  in  luxuries?  The'  average  edifor, ' worsh'fbing  af 
the  shrine  of  Mammon,  and  trembling  in  the  presence  of  “ lail- 
road  kings,’’ says  that' the  poverty  of  the  industrious  millions  is 
■lue  to  their  , intemperate  habits!  It  is  h lamentable  fact  th’at 
many  laboring  people  are  cursed  witli  intemperate  habits;  but  the 
charge  that  moxt  of  them  are  so  cursed,  is  a gratuitous  insult, ' 
Afered  by  those  who  ought  to  know  its  falsity. 

• The  most  serious  fault  of  laboring  people  is  in  conceding  more; 
to  capital  than  its  due;  like  the  capitalists  themselves,  the  laborers 
sanction  the  theory  which  permits  the  former,  through  the  instru- 
mentality of  profits,  interest,  and  rent,  to  appropriate  the  greater 
part  of  the  fruits  of  industry.  They  also  grievously  err  in  giv- 
ing countenance  to  the  doctrine  that  a superabundance  of  laborers 
is  the  cause  of  low  wages,  and  hence  that  the  gates  should  be 
cdosed  against  foreign  laborers,  while  foreign  speculators  are 
permitted  to  come  and  go  at  pleasure.  In  demanding  the  exclu- 
dou  of  foreign  laborers,  the  American  laborer  sanctions  the 
theory  that  wages  legitimately  depend  upon  the  capital  specially 
devoted  to  the  payment  of  wages  and  the  number  of  laborers 
seeking  employment.  This  theory  is  perfectly  consistent  wi  tli 
that  which  permits  the  capitalists  to  appropriate  the  products  of 
industry  in  the  shape  of  profits,  interest,  and  rent;  but  it  is  totally 


8fi  CAUSES  OP  THE  CONPUICT  BETWEEN  CAPITAL  AND  LABOH. 


inconsistent  with  that  theory  which  assigns  to  each  the  products 
of  his  own  labor.  It  is  said  that  foreign  laborers  by  returning 
home  with  their  earnings,  impoverish  the  country.  Is  this  true? 
A million  laborers  come  here  and  remain  one  year,  each  working- 
three  hundred  days,  the  compensation  for  their  services  being 
much  less  than  the  product  of  their  labor.  Each  earns,  say,  $1.50 
a day,  but  he  gets  but  $1.00.  The  record  stands  as  follows: 
Entire  product  of  each  for  the  year  $450;  entire  product  of  the 
1,000,000  men  is  $450,000,000,  of  which  they  get  $300,000,000, 
thus  leaving  in  the  country  $150,000,000  of  the  products  of  their 
labor.  Does  this  look  like  impoverishing  the  country?  Certainly 
not.  If,  however,  this  influx  of  foreign  laborers  displaces  an 
equal  number  of  American  laborers,  who  are  thus  thrown  out  of 
employment — a result  possible  under  the  present  pernicious  theory 
of  wages — this  increase  of  national  wealth  is  detrimental  to  the 
interests  of  the  American  laborer  displaced  by  the  foreigner. 
Self-preservation  being  the  first  law  of  nature,  if  the  current 
theory  of  wages  is  correct,  the  American  laborer  is  justified  in 
demanding  the  exclusion  of  the-foreigner.  The  economists  teach 
that  the  more  numerous  the  laboring  population,  the  lower^  of 
necessity,  must  wages  be.  Accepting  this  theory,  the  laborer, 
fearing  a reduction  of  the  niggardly  pittance  now  received  for  his 
services,  and  mistaking  a result  of  the  same  cause  from  which  he 
suliers,  for  the  cause  itself,  very  consistently  with  the  current 
theory  of  wages,  opposes  the  immigration  of  foreign  laborers. 
But  as  this  is  leaving  the  real  cause  wholly  untouched,  his  efforts 
are  all  in  vain.  The  laborer  can  not  be  permanently  benefited  by 
the  exclusion  of  foreign  laborers;  in  the  end,  all  will  be  injured. 

On  the  contrary,  the  capitalists,  though  accepting  the  current 
theory  of  wages  and  hoping  to  increase  his  profits,  very  naturally 
fatiors  the  immigration  of  foreign  laborers,  whose  services  can  be 
obtained,  temporarily^  for  less  wages  than  can  those  of  the  American 
laborers.  Less  wages,  however,  does  not  necessarily  imply  clieaper 
labor:  if  the  labor  of  the  American  is,  in  efficiency,  double  that  of 
the  immigrant,  the  services  of  the  former,  at  $2.00  a day,  are  a.s 
cheap  as  those  of  the  latter,  at  $1.00.  More  than  this,  the  im- 
ported laborer  has  latent  desires,  sure  to  be  aroused  by  his  nevr 
environments,  he,  therefore,  will  soon  demand  an  increase  of 
wages:  if  he  does  not  do  this,  the  employer,  taking  this  non-ac- 


CAUSKft  OF  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR.  87 


tion  of  the  laborer  as  a favorable  symptom,  will  reduce  the  wages  ; 
inich  action  by  either  of  the  parties,  wdll  perhaps  precipitate  a 
strike  in  which  one  of  the  contestants*  gain  a temporary  h.d- 
vantage;  though,  probably,  all  will  be  ultimately  injured — not 
merely  those  immediately  concerned — all  departments  of  produc- 
tion and  exchange  will  feel  the  shock.  If  the  strike  should,  for- 
tunately, lead  to  llie  abandonment  of  the  theory  of  wages,  which 
is  the  responsible  cause,  infinitely  beneficial  results  would  follow. 
Wise  or  unwise,  beneficial  or  injurious,  right  or  wrong,  strikes 
will  occur  till  the  laborer  is  reduced  to  a condition  of  utter  help- 
lessness, or  till  the  pernicious  theory  of  wages  which  produces  them 
is  replaced  by  that  which  assigns  to  each  laborer  the  entire  uro- 
ducts  of  his  own  industry.  It  is  not  true,  as  many  think,  that 
the  laborer  has  an  inherent  disposition  to  w’age  war  against  a 
correct  theory  of  wages;  the  conflict  is  the  inevitable  result  of 
that  theory  which,  of  itself,  is  a declaration  of  war  against  the 
right  of  each  to  receive  the  full  proceeds  of  his  own  industry. 

Temporarily  and  locally,  the  exclusion  of  foreign  laborers 
7aay  be  beneficial  to  the  American  ; but  ultimately  and  generally, 
instead  of  raising  wages,  it  will  lower  them.  Under  a correct 
theory  of  wages,  the  greater  the  number  of  laborers,  the  greater 
would  be  the  compensation  of  each.  If  properly  organized,  an 
increase  of  laborers  would  produce  a greater  increase  of  wages. 
Keeping  in  mind  the  fact  that,  rightfully,  to  each  laborer  belong 
the  products  of  his  labor,  the  following  illustration  by  the  emi- 
nent economist,  Adam  Smith,  will  show  how  vastly  the  produc- 
tiveness of  labor  is  increased  by  increasing  the  number  of  labor- 
ers; “The  business  of  making  a pin  is  divided  into  about  eight- 
een distinct  operations.  One  man  draws  out  the  wire,  another 
straightens  it,  a third  cuts  it,  a fourth  points  it,  a fifth  grinds  it  at 
the  top  for  receiving  the  head;  to  make  the  head  requires  two  or 
three  operations;  to  put  it  on  is  a peculiar  business ; to  whiten 
the  pins  is  another;  it  is  even  a trade  by  itself  to  put  them  into 
the  paper  * * * i liave  seen  a small  manufactory  where  ten  men 
only  were  employed,  and  where  some  of  them,  consequently,  per- 
formed two  or  three  distinct  operations.  But,  though  they  were 
very  poor,  and  therefore  indifferently  accommodated  with  the 
necessary  machinery,  they  could,  when  they  exerted  themselves, 
make  among  them  about  twelve  pounds  of  pins  in  a day.  There 


88  CAUSES  OK  THE  CONFLICT  BETWEEN  CAPITAL  AND  LABOR. 

are  in  a pound  upward  of  four  thousand  pins  of  a middling  size. 
Those  ten  persons,  therefore,  could  make  among  them  upward  of 
forty-eight  thousand  pins  in  a day.  Each  person,  therefore, 
making  ateptii  part  of  forty  eight  thous.ind  pins,  might  be  con- 
sidered as  making  four  thousand  eight  hundred  pins  in  a day. 
But  if  they  had  all  wrought  separately  and  independently,  and 
without  any  of  thejn  liaving  been  educated  to  this  peculiar  busi- 
ness, they  certainly  could  not  each  of  them  have  made  twenty, 
perhaps  not  one  pin  in  a day.”  Thus  the  wages  of  each  laborer  was 
increased  two  hundred  and  forty  times  in  conse((uence  of  effi- 
ciency gained  by  uniting  with  his  fellows!  Tracing  this  principle 
through  all  the  departments  of  labor,  its  influence  is  seen  to  be 
infinitely  beneficent.  Instead,  therefore,  ot  a numerous  laboring- 
population  tending  to  crowd  wages  down,  the  natural  tendency 
is  to  increase  them.  There  is  no  necessary  conflict  of  interests 
among  the  producers  of  wealth;  no  matter  whether  they  are  fel- 
low-countrymen or  citizens  of  dififerent  countries.  All  conflicts 
among  these,  result  from  adhering  to  a theory  of  wages  originat- 
ing in  an  age  in  which  the  enslavement  of  a fellow-man  was 
thought  to  be  no  sin. 

We  have  thrown  aside  the  instruments  of  production  invented 
by  our  ancestors, but  have  retained  their  theories  of  distribution. The 
sickle  has  been  replaced  by  the  reaper;  the  scythe,  by  the  mower; 
the  ox-cart  by  the  steam  car;  the  birch  canoe,  by  the  steamer; 
the  pitch-pine  torch,  by  the  electric  light;  the  distaff,  l>y  thou- 
sands of  spindles  driven  by  falling  water  or  expansion  of  steam; 
and  the  pedestrian  courier,  by  the  telegraph.  Yet,  through  the 
accidents  of  exchange  carried  on  under  a theory  making  the  dis- 
tribution of  the  products  of  laboi-  a mere  game  of  chance,  these 
wonderful  inventions  of  modern  times  have  fallen  info  the  hands 
of  a few  speculators,  and  thus  instead  of  benefiting  all,  they 
menace  the  liberties  of  the  people.  Strange  as  it  seems,  sucli 
have  been  the  fruits  of  industry  in  all  ages:  the  wealth  produced 
by  all  being  appropriated  by  a few,  has  oppressed  the  great  mass 
of  the  wealth-producers;  hence,  it  is  thought,  that  poverty  is  the 
inevitable  lot  of  the  great  masses  of  mankind.  Instead  of  attril.'- 
utiug  it  to  its  true  cause — mistaken  economic  theories — it  is 
supposed  to  be  due  to  the  fiat  of  Omnipotence;  hence,  all  human 
efforts  aiming  at  different  results  are  vain,  if  not  sacreligious.  If 


CAUSES  OF  THK  CONFLICT  HKTWEEN  (LM’ITAI.  AND  r.AFiOU.  8!) 


this  were  true,  gloomy,  indeed,  would  be  the  future.  Jhit  fortu- 
nately it  is  not  true; 'God  is  no  more  the  Author  of  tlie  current 
theories  of  the  distribution  of  wealth,  than  He  is  of  cannibalism, 
slavery,  theft,  burglary,  murder,  or  any  other  erime--not  f)ne  of 
these  but  has  found  defenders  on  religious  grounds.  The  slave- 
holders said  'that  Cain  was  an  accursed  fratricide;  God  put  a 
mark  on  him;  though  not  so  stated  in  Scri])ture,  they  were  sure 
the  mark  was  black;  hence,  he  was  the  ancestor  of  the  Negro. 
Cain  being  an  antedeluvian,  a failure  to  explain  how  he  or  his  pos- 
terity escaped  the  wrath  of  Heaven  and  survived  the  general 
wreck  of  humanity  in  the  universal  deluge,  rendered  this  theory 
untenable.  A more  plausible  one  was  that  based  upon  the  unlil- 
ial  conduct  of  Ham ; through  the  malediction  of  his  father,  ho 
and  his  posterity  were  doomed  to  serve  Shem  and  Japhet.  But 
the  dilhculty  of  establishing  the  right  of  Noah  to  do  this,  and  the 
further  difficulty  of  identifying  the  Negro  as  the  descetidant  of 
Ham  or  the  slave-holder  as  the  descendant  of  Shem  or  Japhet, 
militated  against  the  authenticity  of  this  theory.  The  next  theory 
was  based  u[)on  the  fact  that  the  Negro  was  a heathen;  this  justi- 
fied the  Christian  in  making  him  a slave.  But  many  of  these 
heathens  became  Christians,  without  any  diminution  of  their  value 
as  chattels;  this  was  an  e^vceediiKjlxj  troublesome  feature  of  the 
theory.  A very  natural  inference  was  tliat,  if  his  being  a heathen 
justified  the  enslavement  of  the  Negro,  lie  logically  must  be  set 
at  liberty  on  becoming  a Christian;  hence,  this  theory  was  far 
from  satisfactory.  After  accepting  and  finall}'  abandoning  many 
.other  theories  equally  as  untenable  as  the  three  preceding,  as  a for- 
lorn hope,  was  advanced  the  following;  “He  is  nothing  but  a 

d anyhow.'’  Though  somewhat  lacking  in  religious 

fervor  and  logical  symmetry,  this  is  tlie  most  pointed  argument 
ever  advanced  in  support  of  the  enslavement  of  man  ; thougli  not 
very  forcible,  it  has  the  merit  of  being  absolutely  unanswerable. 
It  was  short,  easily  wielded,  and,  on  the  whole,  the  best  argument 
ever  offered  in  defense  of  the  inclefensil)le.  To  such  straits  are 
they  reduced  who  seek  Divine  sanction  of  any  theory  which  per- 
mits any  luiman  being,  except  the  unfortunate,  to  appropriate  a 
greater  share  of  the  fruits  of  industry  than  those  to  wkich  his 
services  entitle  him. 

Casting  aside  the  economic  theories  of  the  past  as  they  have 
already  abandoned  the  cotemporary  mechanical  inventions,  let 


90  OF  THK  OONKLrOT  BKTWKKS  CAFiTAL  AND  LABOR. 


the  wealth  producers,  rich  ami  poor,  adopt  tliat  one  which  assigns 
to  each  the  products  of  his  own  industry,  and  instead  of  spend- 
ing lime  and  energies  in  an  ignoble  game  of  chance  for  the  pro- 
ceeds, let  each  striv'c  to  advance  the  welfare  of  all,  thereby  in  the 
greatest  possible  degree  enhancing  his  own  individual  welfare. 
At  this  time  t!\e  population  of  the  United  States  exceeds  50,000,- 
000;  at  the  beginning  of  the  Twentieth  Century  it  will,  possibly, 
be  100,000,000;  before  its  close,  5(X),000,G<)0.  Tf  wise  enough  to 
utilize  the  bounties  of  nature,  and  distribute  them  among  the 
producers,  giviug  to  each  tlie  products  of  his  own  industry,  each 
of  the  500,000,000  may  possess  vastly  more  wealth  than  those  of 
to-day.  Lacking  the  wisdom  requisite  to  make  the  best  use  of 
the  opportunities,  instead  of  a nation  of  freemen,  through  human 
folly,  and  not  Vi\o  fjit  of  Omvipoterv'ie,  this  will  become  a land  of 
ignoble  serfs— modern  civilization  having  given  place  to  ancient 
barbarism.  ‘^‘Eterual  vigilance  is  the  price  of  liberty.”  The  aly 
imps  ordespotism  an;  ever  vigilant;  with  sentinels  sleeping  on  the 
watch-towers,  Liberty  is  ever  in  peril. 

Such  dire  calamity,  not  to  this  republic  alone,  but  to  all  man- 
kind is  not  inevitable;  the  tendency  is  not  the  result  of  an  innate 
inability  of  man  to  work  out  a nobler  destiny.  The  theory  of  the 
“Divine  Right  of  Kings,”  the  seed  of  tyranny,  accompanied  the 
early  settlers  to  America.  Like  noxious  weeds,  such  principles 
thrive  without  cultivation ; hence,  in  time,  the  tyrannical  princi- 
ple flouiishcd  in  all  the  vigor  manifested  in  its  native  soil.  A 
few  appreciated  the  fall  significance  of  liberty;  others  caught 
merely  glimses  of  its  grandeur;  others,  still  bowed  down  in  ador- 
ation in  the  presence  of  kingly  power.  The  English  government 
in  the  hands  of  the  enemies  of  liberty,  encouraged  the  growth  of 
the  spirit  of  tyranny  in  the  New  World,  and  sought  the  extinc- 
tion of  the  spirit  of  liberty;  not  because  the  Englishman,  by  na- 
ture, differs  from  v)ther  men;  the  environments  erected  by  the 
folly  of  tliousauds  of  years  iiad  impressed  upon  the  people  the 
doctrine  of  the  necessity  of  a governing  class,  composed  of  a few, 
commissioned  by  the  authority  of  Heaven  to  rule  the  many; 
obedience  alone  being  the  duty  of  the  latter. 

From  conditions  like  those  specified  above,  but  one  result  is 
possible:  sooner  or  later  there  must  be  a conflict  between  the 
antagonistic  governmental  theories;  no  liuman  power  cun  avoid 


CAtlSKS  OF  TUB  CONFLICT  IIETWKKN  CAI’ITAL  AND  LABOR.  91 


this,  except  by  ridding  the  land  of  one  or  the  other  of  the  oppos- 
ing forces.  The  Heaven-endowed  spirit  of  liberty  may  be  repreas- 
ed,  but  it  cannot  be  extinguished;  as  well  might  puny  man 
attempt  the  extinguishment  of  the  Sun.  The  spirit  of  tyranny, 
being  the  rvvSuU  of  humiiii  ignorance  uud,  folly*  may  be  extin- 
guished, or,  at  least,  totally  obscured,  in  the  brighter  light  of  a 
higher  civilization.  This  spirit,  therefore,  l>eing  an  officious  med- 
dler in  human  affairs,  is  responsible  for  all  conflicts  between  itself 
and  the  spirit  of  liberty ; the  former  has  no  rights  which  entitle 
it  to  even  live,  mucli  lass  to  dominate  the  world ; the  latter  is 
placed,  by  the  Creator,  in  charge  of  ail  men ; no  higher  duty 
than  its  defense,  is  imposed  upon  man. 

It  ivS  no  proof  that  men  are  rebellious  or  in  favor  of  anarchy 
simply  because  they  interjmse  a defense  against  an  invasion  of 
their  rights.  The  dissatisfaction  manifest  in  the  industrial  world 
is  not  without  cause;  the  taboier’s  family,  whose  welfare  is  in 
his  keeping,  are  without  the  means  iieceBsary  for  present  phys- 
ical needs  and  future  intellectual  attainments.  Notwithstanding 
he  works  diligently,  early  and  late,  his  income  is  ina<lequace  to 
meet  the  demands  legitimately  made  upon  him.  He  sees  others 
less  industribus'than  himself,  with  families  no  mote  worthy  tluiin 
his  own,  living  in  luxury,  while  his  family  is  pinched  with  pov- 
erty. It  is  not  mere  instinct  that  suggests  the  existence  of  a 
wrong.  Pie  and  so  far  reasons  c(.n'i‘ectly\  he  knows  tliat 

all  means  of  subsistence,  for  rich  as  well  as  poor,  is  produced  by 
labor.  Evidcutly.  then,  there  is  something  wrong,  othenviae 
those  who  labor  most  would  receive  most,  and,  un.le.ss  extravagant, 
would  have  most.  Unless  industry  is  without  merit,  the  argu- 
ment is  irrefutable.  Immaterial  in  what  capacity  he  lat)ors,  such 
is  the  condition  of  the  laboring-man  today;  it  is,  not  only  his 
right,  it  Is  his  duty  to  protest  against  the  conditions  tlms  imposed 
upon  him.  He  must  be  the  perpetrator  or  the  victim  of  extor- 
tion; the  fact  that  he  may,  by  bare  possibility,  become  a million- 
aire by  ehoslng  the  former  alternative,  will  he  plead  in  vain  in 
dnfe,ase  of  that  system  for  distributing  wealth,  which  assigns  the 
lea.st  to  those  who  produce  the  most.  The  deMderatum  in  the 
industrial  world  is  a system  of  e.xchimge  which  will  assign  to 
each  the  products  of  his  own  industry,  allowing  none  to  appro- 
priate tho,se  rightfully  belonging  to  another.  Those  of  the  pa.st 


0:^5  ('AUSES  OF  TIIF  COiSFLK’T  BETWEEN  CAFITAL  AND  LABUJl. 


liad  uo  such  system;  we  of  to-day  have  no'sueh  system;  tliose  of 
the  future,  immediate  or  remote,  will  have.  The  man  of  to  day, 
Avith  all  his  faults,  is  an  improvement  on  him  of  the  past- century ; 
he  of  the  past  was  an  im})rovement  on  him  of  the  preceding  cen- 
tury; the  latter  was  a vast  improvement  on  his  remote  ancestor, 
primitive  man.  The  man  of  the  coining  century  will  be  an  im- 
provement on  him  of  this;  he  of  the  next  succeeding  century  will 
still  further  advance;  and  eventually,  though  he  will  not  be 
without  imperfections,  he  will  learn  ; that  it  is  nobler  to  live  on 
the  products  of  his  own  industry  tlpin  on  those  produced  by 
others.  Lot  no  one  despair:  Man’s  iMissuon  to  Earth  is  not  yet 
fulfilled. 


/ 


